Is Numérairology the Future of Monetary Economics?
... sufficient speed and flexibility to set the own rate of interest on bread. If in addition money wages or prices were sticky in terms of the bread numéraire, the bakers’ guild would have a non-trivial monetary stabilisation policy role. The welfare significance of the numéraire when there are nominal ...
... sufficient speed and flexibility to set the own rate of interest on bread. If in addition money wages or prices were sticky in terms of the bread numéraire, the bakers’ guild would have a non-trivial monetary stabilisation policy role. The welfare significance of the numéraire when there are nominal ...
The New IS-LM Model: Language, Logic, and Limits
... serially uncorrelated. Third, many economists—including central bankers— remained convinced that the systematic choices of the monetary authority were important for the character of economic fluctuations and thus rejected the model due to the “policy irrelevance” implication. In recent years, there ...
... serially uncorrelated. Third, many economists—including central bankers— remained convinced that the systematic choices of the monetary authority were important for the character of economic fluctuations and thus rejected the model due to the “policy irrelevance” implication. In recent years, there ...
Rudiger Dornbusch Working Paper No. i66
... course, is central to Argentinian macroeconomic instability. In Figures 1—3 we show the behavior the real exchange rate, industrial output, real wages and the premium in the parallel market. The Figures highlight some of the important trends. ...
... course, is central to Argentinian macroeconomic instability. In Figures 1—3 we show the behavior the real exchange rate, industrial output, real wages and the premium in the parallel market. The Figures highlight some of the important trends. ...
Inflating Away the Public Debt? - Centre for Economic Policy Research
... possible path of inflation as well as for realization of uncertainty in the economy. Therefore, there is an unwieldy large number of possible measures of how much the fiscal burden will change in the future. Hall and Sargent (2011), and many that preceded them, partially overcome these problems by u ...
... possible path of inflation as well as for realization of uncertainty in the economy. Therefore, there is an unwieldy large number of possible measures of how much the fiscal burden will change in the future. Hall and Sargent (2011), and many that preceded them, partially overcome these problems by u ...
Minutes of the Federal Open Market Committee June 17–18, 2014
... goods, automotive products, and capital goods rising significantly and exports of capital goods and industrial supplies showing particular strength. U.S. consumer price inflation, as measured by the PCE price index, was about 1½ percent over the 12 months ending in April, below the Committee’s longe ...
... goods, automotive products, and capital goods rising significantly and exports of capital goods and industrial supplies showing particular strength. U.S. consumer price inflation, as measured by the PCE price index, was about 1½ percent over the 12 months ending in April, below the Committee’s longe ...
Aggregate Demand and Aggregate Supply
... All societies experience short-run economic fluctuations around long-run trends. These fluctuations are irregular and largely unpredictable. When recessions occur, real GDP and other measures of income, spending, and production fall, and unemployment rises. Economists analyze short-run econo ...
... All societies experience short-run economic fluctuations around long-run trends. These fluctuations are irregular and largely unpredictable. When recessions occur, real GDP and other measures of income, spending, and production fall, and unemployment rises. Economists analyze short-run econo ...
National income accounting:
... worker (C/L), production per worker (Y/L), the real wage (W/P), and the real return on capital (r =MPK- ). Also calculate long-run equilibrium of GDP (Y). 7b. What is the effect on the long-run equilibrium values of K/L, Y/L, W/P, and the real return on capital (r) if n increases? No need to calcu ...
... worker (C/L), production per worker (Y/L), the real wage (W/P), and the real return on capital (r =MPK- ). Also calculate long-run equilibrium of GDP (Y). 7b. What is the effect on the long-run equilibrium values of K/L, Y/L, W/P, and the real return on capital (r) if n increases? No need to calcu ...
AP Macro Economics 2005 Section I MACROECONOMICS Section I
... B. the Internal Revenue Service spends more than it collects in taxes in a given year C. the federal government spends more than it collects in taxes in a given year D. high levels of unemployment use up tax collections E. interest payments on the national debt increase from one year to the next 6 U ...
... B. the Internal Revenue Service spends more than it collects in taxes in a given year C. the federal government spends more than it collects in taxes in a given year D. high levels of unemployment use up tax collections E. interest payments on the national debt increase from one year to the next 6 U ...
capital theory, inflation and deflation: the austrians and monetary
... quickly and obviously reveal the problem. The problems inflation generates are masked within the capital strwcture and are not easily revealed by macroeconomic aggregates. This presents a crucial problem for monetary policy makers. By the time most of the problems of inflation have become obvious, i ...
... quickly and obviously reveal the problem. The problems inflation generates are masked within the capital strwcture and are not easily revealed by macroeconomic aggregates. This presents a crucial problem for monetary policy makers. By the time most of the problems of inflation have become obvious, i ...
2 aggregate supply and demand:a simple
... is no need to elaborate the details now. A couple of examples should demonstrate the nature of elastic short-run supply. One possibility is that firms face costs of changing their prices. These costs are often called “menu costs,” as in the costs a restaurant faces when it is forced to reprint all o ...
... is no need to elaborate the details now. A couple of examples should demonstrate the nature of elastic short-run supply. One possibility is that firms face costs of changing their prices. These costs are often called “menu costs,” as in the costs a restaurant faces when it is forced to reprint all o ...
unit #8 slides
... • Changes in consumers’ INCOME: • If the economy is growing, consumers’ incomes will tend to INCREASE; if the economy is not growing, consumers’ incomes will tend to DECREASE • If consumers’ incomes are increasing, they will have MORE money to SPEND & they are able to buy MORE of a product at a give ...
... • Changes in consumers’ INCOME: • If the economy is growing, consumers’ incomes will tend to INCREASE; if the economy is not growing, consumers’ incomes will tend to DECREASE • If consumers’ incomes are increasing, they will have MORE money to SPEND & they are able to buy MORE of a product at a give ...
Econ 002 – INTRO MACRO –Prof. Luca Bossi
... c. both of them could be telling the truth if the labor force grew slower than employment. d. both of them could be telling the truth if the labor force grew faster than employment. 15) Most spells of unemployment are a. long, and most unemployment observed at any given time is long term. b. long, b ...
... c. both of them could be telling the truth if the labor force grew slower than employment. d. both of them could be telling the truth if the labor force grew faster than employment. 15) Most spells of unemployment are a. long, and most unemployment observed at any given time is long term. b. long, b ...
Document
... The theory that individuals will demand to hold: •money when interest rates are low (bond prices high) to avoid capital losses when interest rates rise, and ...
... The theory that individuals will demand to hold: •money when interest rates are low (bond prices high) to avoid capital losses when interest rates rise, and ...
ECONOMIC GROWTH, BALANCE OF PAYMENTS AND
... This paper aims to find the interdependency of the economic growth, the balance of payments and inflation in Japan. The Japanese economy has experienced rapid inflation since the autumn of 1972. This recent inflation has not been treated since it depends on a cause quite different from the one which ...
... This paper aims to find the interdependency of the economic growth, the balance of payments and inflation in Japan. The Japanese economy has experienced rapid inflation since the autumn of 1972. This recent inflation has not been treated since it depends on a cause quite different from the one which ...
Lecture 2-3: Measuring Macroeconomic
... Definition: Gross Domestic Product (GDP) is the market value of all _____ goods and services produced within a country in its own currency and in a given period of time. ...
... Definition: Gross Domestic Product (GDP) is the market value of all _____ goods and services produced within a country in its own currency and in a given period of time. ...
irving fisher`s debt deflation analysis
... Periods’, focused on the movements of real interest rates on economic variables, including aggregate production and employment. The central message was the following. Following a monetary disturbance, the subsequent change in the price level tends to change the nominal rate of interest and to bring ...
... Periods’, focused on the movements of real interest rates on economic variables, including aggregate production and employment. The central message was the following. Following a monetary disturbance, the subsequent change in the price level tends to change the nominal rate of interest and to bring ...
The Czech National Bank`s Role Since the Global Crisis
... foreign demand, the GDP growth accelerated to more than 5% in 2004 – 2007. During this period, the output gap gradually opened into the positive territory and the economy, labour market and price developments exhibited some signs of overheating. In order to prevent inflation from going above the tar ...
... foreign demand, the GDP growth accelerated to more than 5% in 2004 – 2007. During this period, the output gap gradually opened into the positive territory and the economy, labour market and price developments exhibited some signs of overheating. In order to prevent inflation from going above the tar ...
The_Taylor_Rule_in_the_1920s16 Full text of working paper
... be argued below, the methods used can matter. An output gap is the difference between actual and potential output, commonly defined as the highest level of output that can be sustained without so stimulating an economy that it experiences an acceleration of inflation.6 ...
... be argued below, the methods used can matter. An output gap is the difference between actual and potential output, commonly defined as the highest level of output that can be sustained without so stimulating an economy that it experiences an acceleration of inflation.6 ...
Document
... (a) the opportunity cost of holding real money balances. (b) the inflation rate. (c) the opportunity cost of holding bonds. (d) the growth rate of output in the long run. The fact that in addition to being a medium of exchange, money serves as a store of value means that (a) movements in the interes ...
... (a) the opportunity cost of holding real money balances. (b) the inflation rate. (c) the opportunity cost of holding bonds. (d) the growth rate of output in the long run. The fact that in addition to being a medium of exchange, money serves as a store of value means that (a) movements in the interes ...
aggregate demand (ad)
... C Consumers' expenditure on goods and services: This includes demand for durables & non-durable goods. I Gross Domestic Fixed Capital Formation - i.e. investment spending by companies on capital goods. Investment also includes spending on working capital such as stocks of finished goods and work in ...
... C Consumers' expenditure on goods and services: This includes demand for durables & non-durable goods. I Gross Domestic Fixed Capital Formation - i.e. investment spending by companies on capital goods. Investment also includes spending on working capital such as stocks of finished goods and work in ...
M o n e t a r y ... C o n t e n t s 1 November 1998
... appear optimistic. On the other hand, with the recent substantial easing in monetary policy, and New Zealand’s previous experience when conditions were at this level, projecting such a modest recovery may seem pessimistic. There remains considerable uncertainty about the outlook, as reflected in the ...
... appear optimistic. On the other hand, with the recent substantial easing in monetary policy, and New Zealand’s previous experience when conditions were at this level, projecting such a modest recovery may seem pessimistic. There remains considerable uncertainty about the outlook, as reflected in the ...
Contents
... share of the burden of restraint has in this cycle tended to fall on the export sector. Less restraint would not necessarily have helped shift the burden elsewhere, but it would certainly have made the task longer and, ultimately, more difficult for all. The policy has, slowly but surely, been whitt ...
... share of the burden of restraint has in this cycle tended to fall on the export sector. Less restraint would not necessarily have helped shift the burden elsewhere, but it would certainly have made the task longer and, ultimately, more difficult for all. The policy has, slowly but surely, been whitt ...
Inflation
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.When the price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the consumer price index) over time. The opposite of inflation is deflation.Inflation affects an economy in various ways, both positive and negative. Negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future.Inflation also has positive effects: Fundamentally, inflation gives everyone an incentive to spend and invest, because if they don't, their money will be worth less in the future. This increase in spending and investment can benefit the economy. However it may also lead to sub-optimal use of resources. Inflation reduces the real burden of debt, both public and private. If you have a fixed-rate mortgage on your house, your salary is likely to increase over time due to wage inflation, but your mortgage payment will stay the same. Over time, your mortgage payment will become a smaller percentage of your earnings, which means that you will have more money to spend. Inflation keeps nominal interest rates above zero, so that central banks can reduce interest rates, when necessary, to stimulate the economy. Inflation reduces unemployment to the extent that unemployment is caused by nominal wage rigidity. When demand for labor falls but nominal wages do not, as typically occurs during a recession, the supply and demand for labor cannot reach equilibrium, and unemployment results. By reducing the real value of a given nominal wage, inflation increases the demand for labor, and therefore reduces unemployment.Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply. However, money supply growth does not necessarily cause inflation. Some economists maintain that under the conditions of a liquidity trap, large monetary injections are like ""pushing on a string"". Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.Today, most economists favor a low and steady rate of inflation. Low (as opposed to zero or negative) inflation reduces the severity of economic recessions by enabling the labor market to adjust more quickly in a downturn, and reduces the risk that a liquidity trap prevents monetary policy from stabilizing the economy. The task of keeping the rate of inflation low and stable is usually given to monetary authorities. Generally, these monetary authorities are the central banks that control monetary policy through the setting of interest rates, through open market operations, and through the setting of banking reserve requirements.