A deflationary wave has arrived in the Eurozone but it is not the next
... spending, in the hope that they will eventually be able to buy goods more cheaply. It could also prompt companies to cut back on investments, for fear that future returns will be lower. This sort of deflationary spiral was avoided in 2009 partly because major central banks responded with bold moneta ...
... spending, in the hope that they will eventually be able to buy goods more cheaply. It could also prompt companies to cut back on investments, for fear that future returns will be lower. This sort of deflationary spiral was avoided in 2009 partly because major central banks responded with bold moneta ...
The Tools of Monetary Policy
... This equation shows that the proportionate change in the price level equals the proportionate change in the quantity of money. This gives us the quantity theory of money: In the long run, the percentage increase in the price level equals the percentage increase in the quantity of money. ...
... This equation shows that the proportionate change in the price level equals the proportionate change in the quantity of money. This gives us the quantity theory of money: In the long run, the percentage increase in the price level equals the percentage increase in the quantity of money. ...
The U.S. Taxpayer Relief Act of 1997 and the Subsequent Housing Bubble:
... home equity loan or mortgage. Agents must then decide how to allocate their consumption good endowment, dividend, housing wealth and new mortgage loan between current consumption, new housing and mortgage repayment. Agents receive utility from the consumption good and housing. Housing consumed this ...
... home equity loan or mortgage. Agents must then decide how to allocate their consumption good endowment, dividend, housing wealth and new mortgage loan between current consumption, new housing and mortgage repayment. Agents receive utility from the consumption good and housing. Housing consumed this ...
UBS Global Real Estate Bubble Index
... wave of global correction. We see a significant overvaluation of housing markets in some key financial centers. What these cities have in common are excessively low interest rates, which are not consistent with the robust performance of the real economy. This is illu strated by the Eurozone, where ...
... wave of global correction. We see a significant overvaluation of housing markets in some key financial centers. What these cities have in common are excessively low interest rates, which are not consistent with the robust performance of the real economy. This is illu strated by the Eurozone, where ...
Unpublished mathematical appendix
... in the global economy, which are imperfect substitutes, and money. Each good is produced by a producer who acts as a monopolistic competitor facing a downward sloping demand curve and chooses the nominal price and the level of production of her good. Production makes only use of labor and, since lab ...
... in the global economy, which are imperfect substitutes, and money. Each good is produced by a producer who acts as a monopolistic competitor facing a downward sloping demand curve and chooses the nominal price and the level of production of her good. Production makes only use of labor and, since lab ...
Price Setting and Monetary Policy in South Africa
... • In the disciplines of macroeconomics and monetary economics a significant emphasis has begun to be placed on the micro-founding of macroeconomic models. • In this context a number of important recent studies have been conducted aimed at gaining a better understanding of price setting behaviour in ...
... • In the disciplines of macroeconomics and monetary economics a significant emphasis has begun to be placed on the micro-founding of macroeconomic models. • In this context a number of important recent studies have been conducted aimed at gaining a better understanding of price setting behaviour in ...
CHAPTER 14: Monetary Policy What Is Monetary Policy?
... The Effects of Monetary Policy on Real GDP and the Price Level Expansionary monetary policy The Federal Reserve’s increasing the money supply and decreasing interest rates in order to increase real GDP. Can the Fed Eliminate Recessions? ...
... The Effects of Monetary Policy on Real GDP and the Price Level Expansionary monetary policy The Federal Reserve’s increasing the money supply and decreasing interest rates in order to increase real GDP. Can the Fed Eliminate Recessions? ...
Lecture 1: Introduction
... • Give up one thing to get another – Opportunity Cost (OC) 2. Everything has an OC – whatever must be given up to get that item 3. People make decisions at the margins – increments matter 4. People respond to incentives – e.g. cigarette laws, communism 5. Free Trade is good (for everybody) ...
... • Give up one thing to get another – Opportunity Cost (OC) 2. Everything has an OC – whatever must be given up to get that item 3. People make decisions at the margins – increments matter 4. People respond to incentives – e.g. cigarette laws, communism 5. Free Trade is good (for everybody) ...
2016 Economics Advanced Higher Finalised Marking
... Full descriptions of the following points will be credited:Inflationary pressures: Lack of spare capacity leads to upward pressure on inflation because shortages of labour/resources drives wages and costs higher (1) which can lead to higher prices if passed on.(1) Rising real wages leads to upwa ...
... Full descriptions of the following points will be credited:Inflationary pressures: Lack of spare capacity leads to upward pressure on inflation because shortages of labour/resources drives wages and costs higher (1) which can lead to higher prices if passed on.(1) Rising real wages leads to upwa ...
Global Collateral - Cowles Foundation
... of differential abilities to supply securitized assets. Overview of the model and results Given this motivating evidence, we analyze how collateralbased financial innovations can produce these observed flows and increased levels of financial volatility. To that end, we consider a two-country model w ...
... of differential abilities to supply securitized assets. Overview of the model and results Given this motivating evidence, we analyze how collateralbased financial innovations can produce these observed flows and increased levels of financial volatility. To that end, we consider a two-country model w ...
The Monetary Transmission Mechanism: Some Answers and Further
... manner distinct from that of the wealth channel. In the broad credit channel, asset prices are especially important in that they determine the value of the collateral that firms and consumers may present when obtaining a loan. In “frictionless” credit markets, a fall in the value of borrowers’ colla ...
... manner distinct from that of the wealth channel. In the broad credit channel, asset prices are especially important in that they determine the value of the collateral that firms and consumers may present when obtaining a loan. In “frictionless” credit markets, a fall in the value of borrowers’ colla ...
A Structural Model of Sovereign Credit Risk
... Arnott and Chaves (2012) find a strong relationship between demographic variables (age group shares) and GDP growth ...
... Arnott and Chaves (2012) find a strong relationship between demographic variables (age group shares) and GDP growth ...
Presentation
... • The Federal Reserve and the Bank of Canada will keep administered rates low for an extended period. • CIBC GAM forecasts a range of 3.25% to 4.25% for long-term yields. Source: PC Bond, a business unit of TSX Inc. and CIBC Global Asset Management Inc. ...
... • The Federal Reserve and the Bank of Canada will keep administered rates low for an extended period. • CIBC GAM forecasts a range of 3.25% to 4.25% for long-term yields. Source: PC Bond, a business unit of TSX Inc. and CIBC Global Asset Management Inc. ...
CEO Overview
... Forward-looking Statements There are statements made herein which do not address historical facts, and therefore could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to factors that could c ...
... Forward-looking Statements There are statements made herein which do not address historical facts, and therefore could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to factors that could c ...
Abstract
... parameterizations, for example, constant elasticity utility functions, often of the Dixit–Stiglitz (1977) variety, and Cobb–Douglas production functions. In using them, we should be aware not only of their special nature, but that they have empirical predictions that can be (and typically are) refut ...
... parameterizations, for example, constant elasticity utility functions, often of the Dixit–Stiglitz (1977) variety, and Cobb–Douglas production functions. In using them, we should be aware not only of their special nature, but that they have empirical predictions that can be (and typically are) refut ...
Chapter 11 Aggregate Demand and Supply
... A) may increase the level of equilibrium output as it raises the price level. B) may lower the price level and the level of equilibrium output. C) may reduce the equilibrium output as it raises the price level. D) is represented by shifting the aggregate supply curve downward. E) is represented by s ...
... A) may increase the level of equilibrium output as it raises the price level. B) may lower the price level and the level of equilibrium output. C) may reduce the equilibrium output as it raises the price level. D) is represented by shifting the aggregate supply curve downward. E) is represented by s ...
ECON 611-001 Money and Central Banking
... Office Hours: 10-12:00 MWF Phone : 492-8268 or by appointment ...
... Office Hours: 10-12:00 MWF Phone : 492-8268 or by appointment ...
Inflation
... decline in value due to both real and perceived general market, economic and industry conditions. Derivatives may involve certain costs and risks, such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in deriva ...
... decline in value due to both real and perceived general market, economic and industry conditions. Derivatives may involve certain costs and risks, such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in deriva ...
what do we know about macroeconomics that
... collection of explanations, each with its own rich dynamics.4 Most explanations focused on one factor at a time: real factors (weather, technological innovations), or expectations (optimistic or pessimistic rms), or money (banks or the central bank). When favorable, these factors led rms to invest ...
... collection of explanations, each with its own rich dynamics.4 Most explanations focused on one factor at a time: real factors (weather, technological innovations), or expectations (optimistic or pessimistic rms), or money (banks or the central bank). When favorable, these factors led rms to invest ...
Kiss Me Deadly: From Finnish Great Depression to Great Recession
... In early 1990s Finland witnessed a protracted economic contraction, one of the biggest to be experienced by an industrialized economy after World War II. This “Finnish Great Depression” started at the beginning of 1990, after several years of rapid economic expansion. The cumulative drop of real GDP ...
... In early 1990s Finland witnessed a protracted economic contraction, one of the biggest to be experienced by an industrialized economy after World War II. This “Finnish Great Depression” started at the beginning of 1990, after several years of rapid economic expansion. The cumulative drop of real GDP ...
Untitled
... Of course, neutrality in this strict sense can never be achieved in the real world. In assessments of real world developments, for instanee by classical authors such as Ricardo, the criterion of neutrality therefore is used in a weaker sense; it refers to the level of output, not its composition (Hu ...
... Of course, neutrality in this strict sense can never be achieved in the real world. In assessments of real world developments, for instanee by classical authors such as Ricardo, the criterion of neutrality therefore is used in a weaker sense; it refers to the level of output, not its composition (Hu ...
Box 3 Deflation - Central Bank of Iceland
... defined as a persistent rise in the general level of prices. Thus a rise in the price of individual goods or a short-term rise in the price level is not considered to be inflation. Similarly, deflation is defined as a persistent decrease in the general level of prices. A decrease in the price level ...
... defined as a persistent rise in the general level of prices. Thus a rise in the price of individual goods or a short-term rise in the price level is not considered to be inflation. Similarly, deflation is defined as a persistent decrease in the general level of prices. A decrease in the price level ...
T P A :
... this idea was later formalised as the “financial accelerator” (bernanke et al., 1996), a concept vital to our understanding of how asset bubbles form: procyclical asset price inflation leaves borrowers with more collateral in good times, meaning they can increase their leverage and investment. this ...
... this idea was later formalised as the “financial accelerator” (bernanke et al., 1996), a concept vital to our understanding of how asset bubbles form: procyclical asset price inflation leaves borrowers with more collateral in good times, meaning they can increase their leverage and investment. this ...
Start with government purchases of goods and services, and with
... First, the interest rate is the price of liquid assets. That is, it is the price at which the demand by consumers and businesses to hold wealth in readily spendable form is equal to the supply of readily spendable assets that the economy's banking system can provide. Every person or business must de ...
... First, the interest rate is the price of liquid assets. That is, it is the price at which the demand by consumers and businesses to hold wealth in readily spendable form is equal to the supply of readily spendable assets that the economy's banking system can provide. Every person or business must de ...
Economic bubble
An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is trade in an asset at a price or price range that strongly deviates from the corresponding asset's intrinsic value. It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.Because it is often difficult to observe intrinsic values in real-life markets, bubbles are often conclusively identified only in retrospect, when a sudden drop in prices appears. Such a drop is known as a crash or a bubble burst. Both the boom and the burst phases of the bubble are examples of a positive feedback mechanism, in contrast to the negative feedback mechanism that determines the equilibrium price under normal market circumstances. Prices in an economic bubble can fluctuate erratically, and become impossible to predict from supply and demand alone.While some economists deny that bubbles occur, the cause of bubbles remains disputed by those who are convinced that asset prices often deviate strongly from intrinsic values. Many explanations have been suggested, and research has recently shown that bubbles may appear even without uncertainty, speculation, or bounded rationality. In such cases, the bubbles may be argued to be rational, where investors at every point fully compensated for the possibility that the bubble might collapse by higher returns. These approaches require that the timing of the bubble collapse can only be forecast probabilistically and the bubble process is often modelled using a Markov switching model. It has also been suggested that bubbles might ultimately be caused by processes of price coordination or emerging social norms.