![Unit 3: Markets, not just for fleas and stocks!](http://s1.studyres.com/store/data/008348031_1-4a20b71556b67a00a3fa6eaf32632a30-300x300.png)
Unit 3: Markets, not just for fleas and stocks!
... INTERdependent pricing Firms set prices based on other firms Price leaders: largest seller sets a price and others follow ...
... INTERdependent pricing Firms set prices based on other firms Price leaders: largest seller sets a price and others follow ...
First Quarter Macro Insights
... Certain information included in this material is based on information obtained from other sources considered reliable. However, NGAM Hong Kong Limited does not guarantee the accuracy of such information. In Australia: This document is issued by NGAM Australia Limited (“NGAM AUST”) (ABN 60 088 786 28 ...
... Certain information included in this material is based on information obtained from other sources considered reliable. However, NGAM Hong Kong Limited does not guarantee the accuracy of such information. In Australia: This document is issued by NGAM Australia Limited (“NGAM AUST”) (ABN 60 088 786 28 ...
Monetary Policy in a Changing Economic Environment
... a clear strategy to sustain it, the ongoing task of identifying the latest economic shocks may easily distract the central bank from the need to maintain a firm sense of direction in the longer run. Next, I advance an interpretation of why the transition to European monetary union— involving, by all ...
... a clear strategy to sustain it, the ongoing task of identifying the latest economic shocks may easily distract the central bank from the need to maintain a firm sense of direction in the longer run. Next, I advance an interpretation of why the transition to European monetary union— involving, by all ...
Outline of Lecture 1 – Basic Economics Concepts
... A lower price level in Country A lowers its interest rate investors will seek higher returns by investing abroad, increasing Country A’s net capital outflow it raises the supply of Country A’s currency, lowering the real exchange rate Country A’s goods become relatively cheaper to foreign good ...
... A lower price level in Country A lowers its interest rate investors will seek higher returns by investing abroad, increasing Country A’s net capital outflow it raises the supply of Country A’s currency, lowering the real exchange rate Country A’s goods become relatively cheaper to foreign good ...
Behavior of Interest Rates
... • That is, for any particular type of bond, the market price P moves inversely to the market interest rate (yield to maturity) i on this type of bond. In most of the following slides, attention will be focused on the bond price P rather than on the interest rate i. But all findings stated in terms o ...
... • That is, for any particular type of bond, the market price P moves inversely to the market interest rate (yield to maturity) i on this type of bond. In most of the following slides, attention will be focused on the bond price P rather than on the interest rate i. But all findings stated in terms o ...
Keynes, Keynesians and Contemporary Monetary Theory and Policy
... Thus Keynes employs Marshallian tools to present in plain English the view of an economy that fluctuates, as a consequence of a volatile marginal efficiency of capital, about a level of economic activity too low to sustain full employment because the rate of interest is too high. There is a str ...
... Thus Keynes employs Marshallian tools to present in plain English the view of an economy that fluctuates, as a consequence of a volatile marginal efficiency of capital, about a level of economic activity too low to sustain full employment because the rate of interest is too high. There is a str ...
The Theory of Unconventional Monetary Policy
... from the fact that, for a given transfer, additional seigniorage revenues reduce the tax burden on all three types. More generally, the wealth effect of a transfer policy will depend on the population growth rate and the period length. 6It would be relatively simple to extend our model to allow for ...
... from the fact that, for a given transfer, additional seigniorage revenues reduce the tax burden on all three types. More generally, the wealth effect of a transfer policy will depend on the population growth rate and the period length. 6It would be relatively simple to extend our model to allow for ...
Policy - QC Economics
... • Changes in velocity are not likely to offset changes in the money supply. • Changes in the money supply will largely determine changes in aggregate demand, and therefore changes in Real GDP and the price level. • An increase in the money supply will raise aggregate demand and increase both Real GD ...
... • Changes in velocity are not likely to offset changes in the money supply. • Changes in the money supply will largely determine changes in aggregate demand, and therefore changes in Real GDP and the price level. • An increase in the money supply will raise aggregate demand and increase both Real GD ...
BIS Working Papers Asset prices, financial and monetary stability: exploring the nexus
... unless the rule responds, directly or indirectly, to the build up of financial imbalances. In principle, safeguards in the financial sphere, in the form of prudential regulation and supervision, might be sufficient to prevent financial distress. In practice, however, they may be less than fully sati ...
... unless the rule responds, directly or indirectly, to the build up of financial imbalances. In principle, safeguards in the financial sphere, in the form of prudential regulation and supervision, might be sufficient to prevent financial distress. In practice, however, they may be less than fully sati ...
Economics 1 - Bakersfield College
... d. Trick question, supply curves actually don’t slope up. 14. When a supply curve shows businesses making quantity Q1 if the price is P1, this is because: a. at that price, customers don’t want to buy more than Q1 of the good. b. it is past Q1 that the cost of production goes above the selling price ...
... d. Trick question, supply curves actually don’t slope up. 14. When a supply curve shows businesses making quantity Q1 if the price is P1, this is because: a. at that price, customers don’t want to buy more than Q1 of the good. b. it is past Q1 that the cost of production goes above the selling price ...
What is Macroeconomics - Katsuhito Iwai`s Webpage.
... It must be emphasized, however, that the whole purpose of the above discussion is not to review this much too familiar story of the income multiplier process. It is rather to make a point (indeed, much too obvious a point) that a phenomenon which is properly called 'macroeconomic' is no more than a ...
... It must be emphasized, however, that the whole purpose of the above discussion is not to review this much too familiar story of the income multiplier process. It is rather to make a point (indeed, much too obvious a point) that a phenomenon which is properly called 'macroeconomic' is no more than a ...
Bank capital, the state contingency of banks` assets and its role for
... Since bank capital is an important determinant of banks’ leverage, which in turn affects how shocks are propagated through the banking sector to the real economy, it is also important to put the focus on the channels which determine the evolution of bank capital in a macroeconomic context. If banks’ ...
... Since bank capital is an important determinant of banks’ leverage, which in turn affects how shocks are propagated through the banking sector to the real economy, it is also important to put the focus on the channels which determine the evolution of bank capital in a macroeconomic context. If banks’ ...
Lecture 11: Inflation: Its Causes and Costs
... With unexpected inflation, wealth is redistributed between net monetary debtors and creditors. This may result in wealth transfers that would not otherwise be acceptable. ...
... With unexpected inflation, wealth is redistributed between net monetary debtors and creditors. This may result in wealth transfers that would not otherwise be acceptable. ...
Varieties of Keynesianism
... financial and economic data possible on a scale unthinkable in the nineteen-twenties. As a result regularities in financial data have come to light that allow the effective use of statistical inference to guide certain types of financial transactions, such as arbitrage. Unfortunately macroeconomic ...
... financial and economic data possible on a scale unthinkable in the nineteen-twenties. As a result regularities in financial data have come to light that allow the effective use of statistical inference to guide certain types of financial transactions, such as arbitrage. Unfortunately macroeconomic ...
Chapter 17
... • When the interest rate rises the opportunity cost of holding money increases and the quantity of money demanded falls • The location of Md is determined by the level of income ...
... • When the interest rate rises the opportunity cost of holding money increases and the quantity of money demanded falls • The location of Md is determined by the level of income ...
Lucas Critique and the Essence of New Classical Approach
... parameter between zero and 1, 0 1 . There is no observation available about the expected price,Pte . How can it be used in a model? . The trick is to solve (1) for Pte and eliminate it using observed variables. First (1) can be written as ...
... parameter between zero and 1, 0 1 . There is no observation available about the expected price,Pte . How can it be used in a model? . The trick is to solve (1) for Pte and eliminate it using observed variables. First (1) can be written as ...
Secular stagnation or financial cycle drag?
... low and below targets, despite very ambitious monetary policy measures. And not only have real interest rates continued their long-term decline, well into negative territory, markets have expected them to remain unusually low way out into the future, as indicated by very shallow yield curves – the r ...
... low and below targets, despite very ambitious monetary policy measures. And not only have real interest rates continued their long-term decline, well into negative territory, markets have expected them to remain unusually low way out into the future, as indicated by very shallow yield curves – the r ...
es09 Wickens 11213611 en
... was the obvious drawbacks to existing assumptions such as static or adaptive expectations, both of which implied that people would persist in making expectation errors even when this was pointed out to them. The immediate attraction of RE was that it implied that current errors could not be predicte ...
... was the obvious drawbacks to existing assumptions such as static or adaptive expectations, both of which implied that people would persist in making expectation errors even when this was pointed out to them. The immediate attraction of RE was that it implied that current errors could not be predicte ...
Flaws in the Marxian Explanations of the Great Recession
... of the on-going chronic Great Recession, “requires us,” as Professor Peter Gowan puts it, “to transcend the commonsense idea that changes in the so-called real economy drive outcomes in a supposed financial superstructure” (2010: 47). ...
... of the on-going chronic Great Recession, “requires us,” as Professor Peter Gowan puts it, “to transcend the commonsense idea that changes in the so-called real economy drive outcomes in a supposed financial superstructure” (2010: 47). ...
International Portfolios: An Incomplete Markets General Equilibrium Approach
... tainability of capital flows) one needs to understand the factors that drive the international portfolio choice, and thus, develop and solve a model with multiple internationally traded assets. Obstfeld (2004) writes: [the early intertemporal models of the current account] now look manifestly inade ...
... tainability of capital flows) one needs to understand the factors that drive the international portfolio choice, and thus, develop and solve a model with multiple internationally traded assets. Obstfeld (2004) writes: [the early intertemporal models of the current account] now look manifestly inade ...
Optimal research in financial markets with heterogeneous private
... and before the realisation of the private signals. Therefore, investors are homogeneous in their research cost decision stage. The model will be solved as a two stage game, where investors make their research decisions based on public information and historical prices. In the trading decision stage, ...
... and before the realisation of the private signals. Therefore, investors are homogeneous in their research cost decision stage. The model will be solved as a two stage game, where investors make their research decisions based on public information and historical prices. In the trading decision stage, ...
Deflation - Tata Mutual Fund
... • How: Deflation occurs when the annual inflation rate falls below zero percent and prices continue to fall on a sustained basis • Why: Deflation is caused by a shift in the supply and demand curve for goods and interest, particularly a fall in the aggregate level of demand. • So: As of now the Indi ...
... • How: Deflation occurs when the annual inflation rate falls below zero percent and prices continue to fall on a sustained basis • Why: Deflation is caused by a shift in the supply and demand curve for goods and interest, particularly a fall in the aggregate level of demand. • So: As of now the Indi ...
TRANCHING, CDS, AND ASSET PRICES: HOW FINANCIAL
... 1986 and 2010 as exogenous and investigate their consequences for asset pricing. Under this view, the tranching of subprime mortgages couldn’t have begun earlier because it had to wait for the innovation of CMO tranching. In later work, we hope to explain why the innovations came when they did and w ...
... 1986 and 2010 as exogenous and investigate their consequences for asset pricing. Under this view, the tranching of subprime mortgages couldn’t have begun earlier because it had to wait for the innovation of CMO tranching. In later work, we hope to explain why the innovations came when they did and w ...
Memo 2 - Department of Basic Education
... By becoming the dominant firm / through price leadership strategy ...
... By becoming the dominant firm / through price leadership strategy ...
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.