Instability of capitalism inflation, unemployment, and business cycles*
... provided different explanations for the instability of capitalism. Marx [1967] contends that capitalists aim at maximizing the surplus value and the rate of profit. As they expect a high rate of profit they will invest and produce commodities. Capitalists will hire workers to implement the productio ...
... provided different explanations for the instability of capitalism. Marx [1967] contends that capitalists aim at maximizing the surplus value and the rate of profit. As they expect a high rate of profit they will invest and produce commodities. Capitalists will hire workers to implement the productio ...
Using Fiscal Policy to Fight Recession
... Aggregate demand and aggregate supply do not always move neatly together. Aggregate demand may fail to increase along with aggregate supply, or aggregate demand may even shift left, for a number of possible reasons: households become hesitant about consuming; rms decide against investing as much; o ...
... Aggregate demand and aggregate supply do not always move neatly together. Aggregate demand may fail to increase along with aggregate supply, or aggregate demand may even shift left, for a number of possible reasons: households become hesitant about consuming; rms decide against investing as much; o ...
State-controlled Banks and the Effectiveness of Monetary Policy
... up a broader range of securities. In either case, buying up debt securities with money increases the money supply and selling debt securities for money deceases the money supply. Buying up debt securities decreases the supply of debt instruments, increasing their prices and driving down their yield ...
... up a broader range of securities. In either case, buying up debt securities with money increases the money supply and selling debt securities for money deceases the money supply. Buying up debt securities decreases the supply of debt instruments, increasing their prices and driving down their yield ...
M09_ABEL4987_7E_IM_C09
... d. The result is no change in employment, output, or the real interest rate e. The price level is higher by the same proportion as the increase in the money supply f. So all real variables (including the real wage) are unchanged, while nominal values (including the nominal wage) have risen proportio ...
... d. The result is no change in employment, output, or the real interest rate e. The price level is higher by the same proportion as the increase in the money supply f. So all real variables (including the real wage) are unchanged, while nominal values (including the nominal wage) have risen proportio ...
15.1 The Evolution of Fiscal Policy
... aggregate demand. Each round of income and spending increases aggregate spending a little more. The multiplier effect of fiscal policy says that any change in fiscal policy affects aggregate demand by more than the original change in spending or taxing. CONTEMPORARY ECONOMICS ...
... aggregate demand. Each round of income and spending increases aggregate spending a little more. The multiplier effect of fiscal policy says that any change in fiscal policy affects aggregate demand by more than the original change in spending or taxing. CONTEMPORARY ECONOMICS ...
NBER WORKING PAPER SERIES SWISS EXCHANGE RATE POLICY IN THE 1930S.
... April 1933? To answer these questions we construct a simple open economy macro model of the interwar Swiss economy. On the basis of this model we then posit counterfactual scenarios of alternative exchange rate pegs in 1931 and 1933. Our analysis combines both effects on the current account and the ...
... April 1933? To answer these questions we construct a simple open economy macro model of the interwar Swiss economy. On the basis of this model we then posit counterfactual scenarios of alternative exchange rate pegs in 1931 and 1933. Our analysis combines both effects on the current account and the ...
Document
... For Critical Analysis: Do you think that online foreign exchange services like those described above will have any impact on exchange rate prices and their volatility? Why or why not? The growth of online services may increase competition among dealers and result in lower trading costs for customers ...
... For Critical Analysis: Do you think that online foreign exchange services like those described above will have any impact on exchange rate prices and their volatility? Why or why not? The growth of online services may increase competition among dealers and result in lower trading costs for customers ...
Inflation Cycles
... by increasing the quantity of money, a process of cost-push inflation continues. © 2010 Pearson Addison-Wesley ...
... by increasing the quantity of money, a process of cost-push inflation continues. © 2010 Pearson Addison-Wesley ...
Macroeconomic Policies and Business Cycles in Nigeria
... forecasting. The stylized facts illustrate how the model mimic the model economy or to what extent the model could be used in policy making. The main facts which business cycle models suggest from the literature include the following that real GDP is persistent; all component of spending are pro-cyc ...
... forecasting. The stylized facts illustrate how the model mimic the model economy or to what extent the model could be used in policy making. The main facts which business cycle models suggest from the literature include the following that real GDP is persistent; all component of spending are pro-cyc ...
M07_ABEL4987_7E_IM_C07
... b. To reduce the money supply, sell financial assets to the public to remove money from circulation—an open-market sale c. Open-market purchases and sales are called open-market operations d. Could also buy newly issued government bonds directly from the government (i.e., the Treasury) (1) This is t ...
... b. To reduce the money supply, sell financial assets to the public to remove money from circulation—an open-market sale c. Open-market purchases and sales are called open-market operations d. Could also buy newly issued government bonds directly from the government (i.e., the Treasury) (1) This is t ...
Review Questions - Leon County Schools
... include consumer spending, investment spending, government spending, net export spending and money supply. Shifts in aggregate supply can also change the level of output and the price level. The determinants of AS include changes in input prices, productivity, the legal institutional environment and ...
... include consumer spending, investment spending, government spending, net export spending and money supply. Shifts in aggregate supply can also change the level of output and the price level. The determinants of AS include changes in input prices, productivity, the legal institutional environment and ...
March 12, 2004
... change their desired reserve ratio to 0.05 (5%). What is the change in Canada’s money supply after all adjustments have taken place? (A) zero (B) +10,000 (C) +$20,000 (D) +$30,000 (E) +$48,000 (F) +$50,000 (G) +$100,000 (H) +$120,000 (I) +$160,000 (J) +$180,000 (K) +$200,000 (L) +$300,000 (M) +$400, ...
... change their desired reserve ratio to 0.05 (5%). What is the change in Canada’s money supply after all adjustments have taken place? (A) zero (B) +10,000 (C) +$20,000 (D) +$30,000 (E) +$48,000 (F) +$50,000 (G) +$100,000 (H) +$120,000 (I) +$160,000 (J) +$180,000 (K) +$200,000 (L) +$300,000 (M) +$400, ...
The Environmental Consequences of Stagnation in Nicaragua
... Following Taylor (1991) recent events in the Nicaraguan economy can be described in terms of three “gaps,” in capacity utilization growth space. The savings gap relates growth to the sum of capital inflow net of debt service, private savings less capital flight and the inflation tax minus the public ...
... Following Taylor (1991) recent events in the Nicaraguan economy can be described in terms of three “gaps,” in capacity utilization growth space. The savings gap relates growth to the sum of capital inflow net of debt service, private savings less capital flight and the inflation tax minus the public ...
The Short-Run Tradeoff between Inflation and Unemployment
... broke down in the in the early ’70s. • During the ’70s and ’80s, the economy experienced high inflation and high unemployment simultaneously. ...
... broke down in the in the early ’70s. • During the ’70s and ’80s, the economy experienced high inflation and high unemployment simultaneously. ...
This PDF is a selection from an out-of-print volume from... Bureau of Economic Research Volume Title: Inflation: Causes and Effects
... from year to year.1 The current inflation is not the most variable peacetime inflation; inflation rates fluctuated more from year to year at the turn of the century and in the Great Depression than they have recently. However, the inflation rate was more variable during the seventies than in the per ...
... from year to year.1 The current inflation is not the most variable peacetime inflation; inflation rates fluctuated more from year to year at the turn of the century and in the Great Depression than they have recently. However, the inflation rate was more variable during the seventies than in the per ...
Estimation of the Equilibrium Real Exchange Rate in Russia: Trade
... a small open economy with a large proportion of commodities in its exports, like Russia, it is more appropriate to view the terms of trade as exogenously given. As stressed by Edwards (1989) in analyzing developing countries, it is more preferable to use internal real exchange rates defined as the d ...
... a small open economy with a large proportion of commodities in its exports, like Russia, it is more appropriate to view the terms of trade as exogenously given. As stressed by Edwards (1989) in analyzing developing countries, it is more preferable to use internal real exchange rates defined as the d ...
Inflation
... Different Types of Expectations • The speed of adjustment of inflation expectations affects how long Y can be pushed beyond YN. • 3 Types of Expectations – Forward-looking Expectations attempt to predict the future behavior of an economic variable using economic models. – Backward-looking Expectati ...
... Different Types of Expectations • The speed of adjustment of inflation expectations affects how long Y can be pushed beyond YN. • 3 Types of Expectations – Forward-looking Expectations attempt to predict the future behavior of an economic variable using economic models. – Backward-looking Expectati ...
Disputes over Macro Theory and Policy
... more specifically, the average price at which each unit of physical output is sold; and Q is the physical volume of all goods and services produced. The left side of the equation of exchanges, MV, represents the total amount spent by purchasers of output, while the right side, PQ, represents the tot ...
... more specifically, the average price at which each unit of physical output is sold; and Q is the physical volume of all goods and services produced. The left side of the equation of exchanges, MV, represents the total amount spent by purchasers of output, while the right side, PQ, represents the tot ...
The Great Escape? A Quantitative Evaluation of the Fed’s Non-Standard Policies ∗
... Ever since Wallace (1982) famous irrelevance result, the benchmark for many macroeconomists is that non-standard open market operations in private assets are irrelevant. This result was extended by Eggertsson and Woodford (2003) to show that it also applies to standard open market operations, i.e. p ...
... Ever since Wallace (1982) famous irrelevance result, the benchmark for many macroeconomists is that non-standard open market operations in private assets are irrelevant. This result was extended by Eggertsson and Woodford (2003) to show that it also applies to standard open market operations, i.e. p ...
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.