Comments on Paul Davidson`s “Full Employment, Open Economy
... The purpose of such a Taylor rule, in a macroeconomic framework, is to make the interest rate endogenous. It shows that, when output increases, or inflation increases, the interest rate will go up. It will do this not because the demand for money increases relative to a fixed supply but because of a ...
... The purpose of such a Taylor rule, in a macroeconomic framework, is to make the interest rate endogenous. It shows that, when output increases, or inflation increases, the interest rate will go up. It will do this not because the demand for money increases relative to a fixed supply but because of a ...
I. International and Domestic Developments Affecting Financial Stability
... growth, there is a policy divergence between the Fed and the ECB. However, the monetary easing policies implemented to ...
... growth, there is a policy divergence between the Fed and the ECB. However, the monetary easing policies implemented to ...
Is Fiscal Austerity Good for the Economy?
... it would seem that a reduction in fiscal policy would necessarily reduce GDP, all else equal. Yet, there are second-round effects on economic activity that are not captured immediately in the national income accounts. One way that fiscal contraction could be expansionary is by calming financial mark ...
... it would seem that a reduction in fiscal policy would necessarily reduce GDP, all else equal. Yet, there are second-round effects on economic activity that are not captured immediately in the national income accounts. One way that fiscal contraction could be expansionary is by calming financial mark ...
Financial Crises, Stabilization, and Deficits
... The huge increase in U.S. stock prices in the last half of the 1990s is a puzzle. So also is the huge increase in U.S. housing prices between 2002 and 2006. Many other countries have seen large increases in asset prices since then as well. An interesting question is whether these rapid run-ups in pr ...
... The huge increase in U.S. stock prices in the last half of the 1990s is a puzzle. So also is the huge increase in U.S. housing prices between 2002 and 2006. Many other countries have seen large increases in asset prices since then as well. An interesting question is whether these rapid run-ups in pr ...
The Aggregate Supply Curve
... given price level, shifting the aggregate demand curve to the right. A decrease in nominal money decreases output at a given price level, shifting the aggregate demand curve to the left. ...
... given price level, shifting the aggregate demand curve to the right. A decrease in nominal money decreases output at a given price level, shifting the aggregate demand curve to the left. ...
dees mmi08 6664950 en
... could be a unit root process (at least in the case of some economies), or its mean might have been subject to structural breaks as some have argued in the case of the industrialised economies over the past two decades. It is also not clear that the HP filter is appropriate for the identification of ...
... could be a unit root process (at least in the case of some economies), or its mean might have been subject to structural breaks as some have argued in the case of the industrialised economies over the past two decades. It is also not clear that the HP filter is appropriate for the identification of ...
NBER WORKING PAPER SERIES PRIVATE PENSIONS INFLATION Martin Feldstein
... 1 The inflation-induced growth of the assets of pension funds would also be reduced to the extent that households save less in response to the lower real yield on saving or divert saving into nonportfolio assets like housing and land. 2 Joseph Stiglitz (1973) develops an analysis which shows that un ...
... 1 The inflation-induced growth of the assets of pension funds would also be reduced to the extent that households save less in response to the lower real yield on saving or divert saving into nonportfolio assets like housing and land. 2 Joseph Stiglitz (1973) develops an analysis which shows that un ...
Macroeconomic Priorities - NYU Stern School of Business
... it would fall far short of the removal of all variability. The major empirical nding in macroeconomics over the past 25 years was the demonstration by Finn E. Kydland and Prescott (1982), replicated and re ned by Gary D. Hansen (1985) and by many others since then, that technology shocks measured ...
... it would fall far short of the removal of all variability. The major empirical nding in macroeconomics over the past 25 years was the demonstration by Finn E. Kydland and Prescott (1982), replicated and re ned by Gary D. Hansen (1985) and by many others since then, that technology shocks measured ...
The Global Crisis and the Turkish Economy
... For such an assessment, we first need to establish the depth of the recession. In the first quarter of 2009, the Turkish economy recorded the sharpest quarterly GDP decline of the last three decades, at -14.3%, and the highest unemployment rate, at nearly 16%. These are among the highest rates when ...
... For such an assessment, we first need to establish the depth of the recession. In the first quarter of 2009, the Turkish economy recorded the sharpest quarterly GDP decline of the last three decades, at -14.3%, and the highest unemployment rate, at nearly 16%. These are among the highest rates when ...
Analyzing and Forecasting the Canadian
... where forecasts of the levels of many variables are required. For instance, the cointegrating relationships implied by ToTEM are often counterfactual, leading us to detrend the data and deal with long-term trends separately. This implies that trend movements have no cyclical implications in ToTEM. I ...
... where forecasts of the levels of many variables are required. For instance, the cointegrating relationships implied by ToTEM are often counterfactual, leading us to detrend the data and deal with long-term trends separately. This implies that trend movements have no cyclical implications in ToTEM. I ...
AP Macro Economics 2005 Section I MACROECONOMICS Section I
... 27 If the real interest rate in country X increases relative to the real interests rate in Country Y and there are no trade barriers between the two counties, then for Country X which of following will be true of its capital flow, the value of its currency, and its exports? ...
... 27 If the real interest rate in country X increases relative to the real interests rate in Country Y and there are no trade barriers between the two counties, then for Country X which of following will be true of its capital flow, the value of its currency, and its exports? ...
Monetary Policy, Financial Conditions, and Financial Stability
... balance sheets of borrowers and lenders. 1 However, when the output gap is close to zero, financial stability considerations would have greater weight in reducing variance. In this situation, a trade-off may emerge as loose financial conditions to continue to promote current economic growth could le ...
... balance sheets of borrowers and lenders. 1 However, when the output gap is close to zero, financial stability considerations would have greater weight in reducing variance. In this situation, a trade-off may emerge as loose financial conditions to continue to promote current economic growth could le ...
Vo l u m e 6 5 ... C o n t e n t s
... In any particular period, inflation is unlikely to be exactly as forecast, given that the economy is affected by unforeseeable events and inflation is far from perfectly controllable. However, it is important to have a good understanding of why inflation has evolved as it has, and not as predicted. ...
... In any particular period, inflation is unlikely to be exactly as forecast, given that the economy is affected by unforeseeable events and inflation is far from perfectly controllable. However, it is important to have a good understanding of why inflation has evolved as it has, and not as predicted. ...
PDF
... formed, a priori, by the Federal Reserve Chairman’s speeches and Fed announcements. The impacts of those announcements depend on the state of the economy at the time, as well as agents’ risk perceptions. The first round of QEs (QE1 in 2008-2010) was announced at the end of 2008 (early in the Great R ...
... formed, a priori, by the Federal Reserve Chairman’s speeches and Fed announcements. The impacts of those announcements depend on the state of the economy at the time, as well as agents’ risk perceptions. The first round of QEs (QE1 in 2008-2010) was announced at the end of 2008 (early in the Great R ...
Document
... Which of the following would cause demand for M1 to increase? (a) Banks make taking out home equity loans easier. (b) The market for closed-end stock mutual funds becomes more liquid. (c) Early withdrawal penalties for certificates of deposit are eliminated. (d) Several major corporations default on ...
... Which of the following would cause demand for M1 to increase? (a) Banks make taking out home equity loans easier. (b) The market for closed-end stock mutual funds becomes more liquid. (c) Early withdrawal penalties for certificates of deposit are eliminated. (d) Several major corporations default on ...
Chapter 9 Saving, Investment, and Interest Rates
... budgets are in deficit. The interest rate is not the same for all borrowers, and different interest rates are paid on different financial assets. B) Interest rates vary with the conditions of Risk, Liquidity, and Maturity associated with a loan. 1. Lenders must be compensated for the extra risk of l ...
... budgets are in deficit. The interest rate is not the same for all borrowers, and different interest rates are paid on different financial assets. B) Interest rates vary with the conditions of Risk, Liquidity, and Maturity associated with a loan. 1. Lenders must be compensated for the extra risk of l ...
EC 102.07-08-09 Exercises for Chapter 33 SPRING 2006 1. Ceteris
... 1. Explain how an increase in the price level changes interest rates. How does this change in interest rates lead to changes in investment and net exports? ANSWER: When the price level increases, the purchasing power of money held in purses and bank accounts declines. This decline makes people feel ...
... 1. Explain how an increase in the price level changes interest rates. How does this change in interest rates lead to changes in investment and net exports? ANSWER: When the price level increases, the purchasing power of money held in purses and bank accounts declines. This decline makes people feel ...
The Role of Expectations in the FRB/US Macroeconomic Model
... The lack of adequate data has meant that builders of macroeconomic models have had to specify a priori how individuals form expectations (see box ‘‘Assumptions about the Ways in Which Expectations Are Formed’’). Most models developed in the 1960s and 1970s, including MPS, incorporated the simplifyin ...
... The lack of adequate data has meant that builders of macroeconomic models have had to specify a priori how individuals form expectations (see box ‘‘Assumptions about the Ways in Which Expectations Are Formed’’). Most models developed in the 1960s and 1970s, including MPS, incorporated the simplifyin ...
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.Further goals of a monetary policy are usually to contribute to economic growth and stability, to lower unemployment, and to maintain predictable exchange rates with other currencies.Monetary economics provides insight into how to craft optimal monetary policy.Monetary policy is referred to as either being expansionary or contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in order to avoid the resulting distortions and deterioration of asset values.Monetary policy differs from fiscal policy, which refers to taxation, government spending, and associated borrowing.