Exchange rate volatility effects on export competitiveness
... of the trading partners and by type of sector involved in trade. Given the rise of some developing countries in world trade and the change in the composition of world trade during the last decades it is important to understand how export responses to shocks may vary by trading partners and by sector ...
... of the trading partners and by type of sector involved in trade. Given the rise of some developing countries in world trade and the change in the composition of world trade during the last decades it is important to understand how export responses to shocks may vary by trading partners and by sector ...
CHAPTER 9 Introduction to Economic Fluctuations
... If the Fed cares about keeping output and employment at their natural-rate levels, then it should increase aggregate demand by increasing the money supply. This policy response shifts the aggregate demand curve upwards, as shown in the shift from AD1 to AD2 in Figure 9–12. In this case, the economy ...
... If the Fed cares about keeping output and employment at their natural-rate levels, then it should increase aggregate demand by increasing the money supply. This policy response shifts the aggregate demand curve upwards, as shown in the shift from AD1 to AD2 in Figure 9–12. In this case, the economy ...
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 ...
Essay Questions
... Answer: When the real exchange rate increases, domestic products are cheaper relative to foreign products. Due to this, exports increase as foreigners demand more domestic exports. The change in imports is ambiguous because fewer units of imports are purchased (the volume effect), but each foreign u ...
... Answer: When the real exchange rate increases, domestic products are cheaper relative to foreign products. Due to this, exports increase as foreigners demand more domestic exports. The change in imports is ambiguous because fewer units of imports are purchased (the volume effect), but each foreign u ...
A Structural Model of Australia as a Small Open Economy
... that an increase in St implies a depreciation of the domestic currency. The term ψ ∗2 2 Bt is a cost paid by domestic households when they are net borrowers in the aggregate.4 This ensures that the net asset position of the domestic economy is stationary and it implies that, ceteris paribus, a highl ...
... that an increase in St implies a depreciation of the domestic currency. The term ψ ∗2 2 Bt is a cost paid by domestic households when they are net borrowers in the aggregate.4 This ensures that the net asset position of the domestic economy is stationary and it implies that, ceteris paribus, a highl ...
International Trade and Echange Rates
... Country A is relatively efficient in making bicycles because it has a lower internal opportunity cost than Country B. A gives up just 0.4 of a computer for one extra bike while B gives up 5 computers. Country A has the comparative advantage in bicycles. Country B is relatively efficient in making co ...
... Country A is relatively efficient in making bicycles because it has a lower internal opportunity cost than Country B. A gives up just 0.4 of a computer for one extra bike while B gives up 5 computers. Country A has the comparative advantage in bicycles. Country B is relatively efficient in making co ...
Sweden`s Approach to Monetary Policy
... much as they need as long as they can offer collateral), the Riksbank saw no need to establish a special borrowing facility for the century date change. Sweden achieved a public sector financial surplus in 1998 for the first time since 1990, and ongoing surpluses are expected. Indeed, the government ...
... much as they need as long as they can offer collateral), the Riksbank saw no need to establish a special borrowing facility for the century date change. Sweden achieved a public sector financial surplus in 1998 for the first time since 1990, and ongoing surpluses are expected. Indeed, the government ...
Contents - Scuola Superiore Sant`Anna
... central goal of macroeconomics is to provide “coherent and robust explanations of aggregate movements of output, employment and the price level, in both the short run and the long run”. But before examining the causes of these phenomena, we have to identify their typical features and find out how th ...
... central goal of macroeconomics is to provide “coherent and robust explanations of aggregate movements of output, employment and the price level, in both the short run and the long run”. But before examining the causes of these phenomena, we have to identify their typical features and find out how th ...
L7-9InstrumentsMABP
... Argentina was on a currency board => no sterilization. In 1995 allowed reserve outflows to shrink the money supply, raise i, contract spending. ...
... Argentina was on a currency board => no sterilization. In 1995 allowed reserve outflows to shrink the money supply, raise i, contract spending. ...
Chapter 16 Money in macroeconomics
... • 0 i.e., the monetary base, sometimes called base money or highpowered money. This is defined as fully liquid claims on the central bank held by the private sector, that is, currency (coins and notes) in circulation plus demand deposits held by the commercial banks in the central bank.1 This mon ...
... • 0 i.e., the monetary base, sometimes called base money or highpowered money. This is defined as fully liquid claims on the central bank held by the private sector, that is, currency (coins and notes) in circulation plus demand deposits held by the commercial banks in the central bank.1 This mon ...
The Japanese Economy during the Interwar Period:
... In January 1927, the Wakatsuki Cabinet of the ruling Kensei-kai Party took a step to facilitate the final disposition of the bad debts incurred by the Great Kanto Earthquake by submitting legislation to the Diet requiring adjustments of the ECBs. This legislation allowed the government to issue bond ...
... In January 1927, the Wakatsuki Cabinet of the ruling Kensei-kai Party took a step to facilitate the final disposition of the bad debts incurred by the Great Kanto Earthquake by submitting legislation to the Diet requiring adjustments of the ECBs. This legislation allowed the government to issue bond ...
Strategies for Controlling Inflation
... bankers and even in the public at large, that inflation reduction and price stability should be the primary or overriding long-term goal of monetary policy. This consensus has emerged from economic research and actual economic events over the past thirty years, as is discussed in this section. The r ...
... bankers and even in the public at large, that inflation reduction and price stability should be the primary or overriding long-term goal of monetary policy. This consensus has emerged from economic research and actual economic events over the past thirty years, as is discussed in this section. The r ...
Presentation, Powerpoint 345kb - The Cambridge Trust for New
... Changes in the real rate of interest can only affect aggregate demand in the short run; In the long run changes in the rate of interest affect inflation only; ...
... Changes in the real rate of interest can only affect aggregate demand in the short run; In the long run changes in the rate of interest affect inflation only; ...
Inflation During and After the Zero Lower Bound
... blessing for empirical researchers who are trying to explain very different macroeconomic experiences, say in the U.S. and Japan, with a single economic model. Unfortunately, it may turn out to be a curse for policy makers, because the same monetary policy action of, say, changing interest rates or ...
... blessing for empirical researchers who are trying to explain very different macroeconomic experiences, say in the U.S. and Japan, with a single economic model. Unfortunately, it may turn out to be a curse for policy makers, because the same monetary policy action of, say, changing interest rates or ...
Chapter 10 Aggregate Demand & Aggregate Supply
... by the fallacy of composition. One market, like autos, might adjust, but markets in the rest of the economy may not adjust at the same time. ...
... by the fallacy of composition. One market, like autos, might adjust, but markets in the rest of the economy may not adjust at the same time. ...
This PDF is a selection from a published volume from... Bureau of Economic Research
... the model for inflation, showing that they are not far from the data. A key feature of the model is the presence of sticky wages, which relaxes the tight link between the output gap and real marginal costs typical of the simplest version of the NK model (Woodford 2003, or Galí 2008), improving the f ...
... the model for inflation, showing that they are not far from the data. A key feature of the model is the presence of sticky wages, which relaxes the tight link between the output gap and real marginal costs typical of the simplest version of the NK model (Woodford 2003, or Galí 2008), improving the f ...
Exchange Rates
... whether currencies are at their “correct” level, burgernomics is based on the theory of purchasingpower parity (PPP). This says that, in the long run, exchange rates should move toward rates that would equalise the prices of an identical basket of goods and services in any two countries. To put it s ...
... whether currencies are at their “correct” level, burgernomics is based on the theory of purchasingpower parity (PPP). This says that, in the long run, exchange rates should move toward rates that would equalise the prices of an identical basket of goods and services in any two countries. To put it s ...
inflation - WordPress.com
... increasing or decreasing its production. A fundamental concept in Keynesian analysis is the relationship between inflation and unemployment, called the Phillips curve. This model suggests that there is a trade-off between price stability and employment. Therefore, some level of inflation could be co ...
... increasing or decreasing its production. A fundamental concept in Keynesian analysis is the relationship between inflation and unemployment, called the Phillips curve. This model suggests that there is a trade-off between price stability and employment. Therefore, some level of inflation could be co ...
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.