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Working Paper No. 59 James R. Lothian Anthony Cassese 1050
... First let us consider the question of price arbitrage. Here the empirical evidence to date is inconsistent with convergence of overall rates of inflation within a quarter and perhaps even within the period of several years.5 One reason may be the existence of sizeable non—tradeable goods sectors. In ...
... First let us consider the question of price arbitrage. Here the empirical evidence to date is inconsistent with convergence of overall rates of inflation within a quarter and perhaps even within the period of several years.5 One reason may be the existence of sizeable non—tradeable goods sectors. In ...
3.3 and 3.4
... • Wealth = assets – Physical and monetary – Change in house/stock prices affects this ...
... • Wealth = assets – Physical and monetary – Change in house/stock prices affects this ...
The influence of monetary on aggregate demand (short run)
... – People - increase their holdings of money • Sell - interest-bearing assets ...
... – People - increase their holdings of money • Sell - interest-bearing assets ...
homework 3 (chapter 34) eco 11 fall 2006 udayan roy
... a. short run and supposes that the price level adjusts to bring money supply and money demand into balance. b. short run and supposes that the interest rate adjusts to bring money supply and money demand into balance. c. long run and supposes that the price level adjusts to bring money supply and mo ...
... a. short run and supposes that the price level adjusts to bring money supply and money demand into balance. b. short run and supposes that the interest rate adjusts to bring money supply and money demand into balance. c. long run and supposes that the price level adjusts to bring money supply and mo ...
Inequality, the financial crisis and stagnation: competing stories and
... prompted a populist political response focused on making homeownership more affordable. This involved government interventions in the housing finance market which encouraged homeownership beyond people’s means and spurred a credit-driven house price bubble. When the bubble eventually burst in 2006, ...
... prompted a populist political response focused on making homeownership more affordable. This involved government interventions in the housing finance market which encouraged homeownership beyond people’s means and spurred a credit-driven house price bubble. When the bubble eventually burst in 2006, ...
mmi12-Hristov 17805180 en
... to differences in firm specific prices. As the authors note, there are various rationales for this assumption - information imperfections, habits as well as costs of decision-making. An immediate consequence of such frictions is that in the (very) short run each firm has some monopoly power over a ...
... to differences in firm specific prices. As the authors note, there are various rationales for this assumption - information imperfections, habits as well as costs of decision-making. An immediate consequence of such frictions is that in the (very) short run each firm has some monopoly power over a ...
A Structural Model Of Sovereign Credit Risk
... – Default occurs if renegotiation makes debt burden more costly; renegotiation split between local currency and foreign currency holders is based on a Nash equilibrium Revenue driven default does not consider the potential for future improvement Estimates of sanction size in “rational default de ...
... – Default occurs if renegotiation makes debt burden more costly; renegotiation split between local currency and foreign currency holders is based on a Nash equilibrium Revenue driven default does not consider the potential for future improvement Estimates of sanction size in “rational default de ...
Macroeconomic Stabilization and Structural Reform
... is to find the right combination of monetary, fiscal, and structural policy measures that improve the balance of payments ... ... without damaging other important macroeconomic variables, including output and employment. ...
... is to find the right combination of monetary, fiscal, and structural policy measures that improve the balance of payments ... ... without damaging other important macroeconomic variables, including output and employment. ...
Section 1.3: Advantages of monetary economy over
... diversify their investment dollars to a variety of assets. MMMF is a mutual fund that the mutual fund manager is required to invest only in money market instruments which means short-term ...
... diversify their investment dollars to a variety of assets. MMMF is a mutual fund that the mutual fund manager is required to invest only in money market instruments which means short-term ...
Presentation by Liqing Zhang, Zhigang Huang
... changes in theoretical. High economic growth brings high income of household, so the demand of house increases, and pulls asset prices up. Unfortunately, this effect is not significant in China (Figure 6). It might be existed other factor to diminish this effect. ...
... changes in theoretical. High economic growth brings high income of household, so the demand of house increases, and pulls asset prices up. Unfortunately, this effect is not significant in China (Figure 6). It might be existed other factor to diminish this effect. ...
DEFLATION – A PROBLEM OF THE SOCIO
... conventional manner. The problem may further be complicated, for example, following a collapse in asset prices, the result of which as a rule is the need to make structural reforms. In a deflationary situation irrevocable receivables of the central bank grow and probably strengthen their aversion to ...
... conventional manner. The problem may further be complicated, for example, following a collapse in asset prices, the result of which as a rule is the need to make structural reforms. In a deflationary situation irrevocable receivables of the central bank grow and probably strengthen their aversion to ...
Kiss Me Deadly: From Finnish Great Depression to Great Recession
... Nevertheless, the Great Recession in Finland was very different than early 1990s. The drop of GDP is attributed solely to external shocks — an increase in global financial stress and a slump in global demand. In fact, the negative external demand shocks were much stronger (although much more short l ...
... Nevertheless, the Great Recession in Finland was very different than early 1990s. The drop of GDP is attributed solely to external shocks — an increase in global financial stress and a slump in global demand. In fact, the negative external demand shocks were much stronger (although much more short l ...
Macroeconomic Stabilization and Structural Reform
... is to find the right combination of monetary, fiscal, and structural policy measures that improve the balance of payments ... ... without damaging other important macroeconomic variables, including output and employment. ...
... is to find the right combination of monetary, fiscal, and structural policy measures that improve the balance of payments ... ... without damaging other important macroeconomic variables, including output and employment. ...
Reserve flows & the gold standard
... 1925 -- ill-fated UK return to gold <= misplaced faith in flexible prices. 1944 -- Bretton Woods system, based on gold as the reserve asset. 1945-1971 -de facto: based on $. 1958 -- Start of US BoP deficits. <= European growth > US growth ...
... 1925 -- ill-fated UK return to gold <= misplaced faith in flexible prices. 1944 -- Bretton Woods system, based on gold as the reserve asset. 1945-1971 -de facto: based on $. 1958 -- Start of US BoP deficits. <= European growth > US growth ...
Chapter 15
... Index of Leading Indicators • The index of leading indicators consists of economic data series that usually turn up or down several months before general economic conditions change. • The major problem with this index is that it provides too many false signals, indicating that a recession is immine ...
... Index of Leading Indicators • The index of leading indicators consists of economic data series that usually turn up or down several months before general economic conditions change. • The major problem with this index is that it provides too many false signals, indicating that a recession is immine ...
1 - Rutgers University
... and Lee argued that (2009) Black’s theoretically elegant model has never been empirically tested for its implications in dynamic asset pricing. theoretically extend Black’s CAPM. ...
... and Lee argued that (2009) Black’s theoretically elegant model has never been empirically tested for its implications in dynamic asset pricing. theoretically extend Black’s CAPM. ...
Liquid Capital and Market Liquidity
... variation in the aggregate degree of transformability affects securities prices, returns dynamics, and market liquidity. Understanding the latter linkage provides the primary motivation, since the aggregate transformability of capital corresponds to a second, economically distinct, notion of liquid ...
... variation in the aggregate degree of transformability affects securities prices, returns dynamics, and market liquidity. Understanding the latter linkage provides the primary motivation, since the aggregate transformability of capital corresponds to a second, economically distinct, notion of liquid ...
Macroeconomics
... “Price Index”: wtd average of sample of prices Several Price Indices CPI PPI GDP Deflator Index Number: base year = 100 ...
... “Price Index”: wtd average of sample of prices Several Price Indices CPI PPI GDP Deflator Index Number: base year = 100 ...
EXCESSIVE LIQUIDITY PREFERENCE Prabhat Patnaik
... periodically. This introduced a carrying cost into money holding, discouraging liquidity preference. Keynes, while appreciating the idea and even suggesting that the rate of carrying cost should be so adjusted that it equalled the difference between the interest rate and the marginal efficiency of c ...
... periodically. This introduced a carrying cost into money holding, discouraging liquidity preference. Keynes, while appreciating the idea and even suggesting that the rate of carrying cost should be so adjusted that it equalled the difference between the interest rate and the marginal efficiency of c ...
Global safe assets - Bank for International Settlements
... without a suitably safe store of value. Without this safe anchor, the financial system would experience greater systemic instability. As recently as April 2012, the IMF in chapter 3 of its Global Financial Stability Report (2012, p.1), expressed the concern that “the shrinking set of assets perceive ...
... without a suitably safe store of value. Without this safe anchor, the financial system would experience greater systemic instability. As recently as April 2012, the IMF in chapter 3 of its Global Financial Stability Report (2012, p.1), expressed the concern that “the shrinking set of assets perceive ...
Financialization - Hans-Böckler
... As always, there is some mainstream literature challenging these conclusions, and that literature is growing with the emergence of the behavioral finance approach. For instance, rational expectations theory (Flood and Garber, 1980) acknowledges that market participants can rationally participate in ...
... As always, there is some mainstream literature challenging these conclusions, and that literature is growing with the emergence of the behavioral finance approach. For instance, rational expectations theory (Flood and Garber, 1980) acknowledges that market participants can rationally participate in ...
This PDF is a selection from an out-of-print volume from... Volume Title: The State of Monetary Economics
... Measures of Economic Growth." More typical is a standard textbook statement that monetary policy is weak as a stimulator of demand (ibid., p. 53 f.), when at least one staff paper (Milton Friedman and David Meiselinan, "The ...
... Measures of Economic Growth." More typical is a standard textbook statement that monetary policy is weak as a stimulator of demand (ibid., p. 53 f.), when at least one staff paper (Milton Friedman and David Meiselinan, "The ...
IFI_Ch10
... The Argentine Crisis of 2002 • In order to eliminate the hyperinflation problem that had undermined the nation’s standard of living in the 1980s, a currency board structure was implemented in Argentina in the early 1990s • In 1991, the Argentine peso had been fixed to the US dollar at a one-to-one r ...
... The Argentine Crisis of 2002 • In order to eliminate the hyperinflation problem that had undermined the nation’s standard of living in the 1980s, a currency board structure was implemented in Argentina in the early 1990s • In 1991, the Argentine peso had been fixed to the US dollar at a one-to-one r ...
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... policy to have a medium-term orientation. Furthermore, in response to some types of unforeseen economic disturbance with an impact on the price level that may threaten price stability, a medium-term orientation of monetary policy is important in order to permit a gradualist and measured response, wh ...
... policy to have a medium-term orientation. Furthermore, in response to some types of unforeseen economic disturbance with an impact on the price level that may threaten price stability, a medium-term orientation of monetary policy is important in order to permit a gradualist and measured response, wh ...
Economic bubble
![](https://commons.wikimedia.org/wiki/Special:FilePath/South_Sea_Bubble_Cards-Tree.png?width=300)
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.