Place Mat Financial Crisis
... Chinese data at the time of writing this resource: inflation rate 1.3%, economic growth rate 1.8%, unemployment rate ...
... Chinese data at the time of writing this resource: inflation rate 1.3%, economic growth rate 1.8%, unemployment rate ...
Bubbles, Crashes, and Endogenous Expectations in Experimental
... be uncertain as to the behavior of others with the same information. Operationally, then, in testing market efficiency or rational expectations in multiperiod asset environments, the important issue is whether through learning within and across (experimental or natural) markets agents will come to " ...
... be uncertain as to the behavior of others with the same information. Operationally, then, in testing market efficiency or rational expectations in multiperiod asset environments, the important issue is whether through learning within and across (experimental or natural) markets agents will come to " ...
Ch 4:Determining Interest Rates
... b. Suppose that you expect a greater increase in inflation than do other investors, but not until 2015. Should you wait until 2015 to sell your bonds? The nominal interest rate will adjust to changes in E(inflation). Waiting until the nominal interest rate rises would be too late to avoid the capita ...
... b. Suppose that you expect a greater increase in inflation than do other investors, but not until 2015. Should you wait until 2015 to sell your bonds? The nominal interest rate will adjust to changes in E(inflation). Waiting until the nominal interest rate rises would be too late to avoid the capita ...
This PDF is a selection from a published volume from... Bureau of Economic Research
... An important consequence of this theory is that equilibrium returns on many different assets (and not just money) should reflect in part a liquidity premium; the authors propose that this may account for a substantial part of the well-known “equity premium puzzle” (the surprisingly large differentia ...
... An important consequence of this theory is that equilibrium returns on many different assets (and not just money) should reflect in part a liquidity premium; the authors propose that this may account for a substantial part of the well-known “equity premium puzzle” (the surprisingly large differentia ...
The Dazzling Dollar (Brookings Papers on Economic Activity, 1985
... WarII worldeconomy. It is widely agreedthatthe source of the increase in the price of the dollar is an increase in the attractivenessof dollar assets to investors aroundthe world. But what makes U.S. assets more attractive?At the risk of being uncontroversial,I continue to believe that the increase ...
... WarII worldeconomy. It is widely agreedthatthe source of the increase in the price of the dollar is an increase in the attractivenessof dollar assets to investors aroundthe world. But what makes U.S. assets more attractive?At the risk of being uncontroversial,I continue to believe that the increase ...
Ch 14
... The market interest rate is inversely related to the price of existing bonds. Consider the Liquidity Trap: the reason an increase in the money supply does not result in an excess supply of money at a low interest rate is that individuals believe bond prices are so high that an investment in bonds is ...
... The market interest rate is inversely related to the price of existing bonds. Consider the Liquidity Trap: the reason an increase in the money supply does not result in an excess supply of money at a low interest rate is that individuals believe bond prices are so high that an investment in bonds is ...
Modern Principles of Economics
... Firms in the old Soviet Union never went bankrupt. How do you think this influenced the rate of innovation and economic growth? Slide 15 of 25 ...
... Firms in the old Soviet Union never went bankrupt. How do you think this influenced the rate of innovation and economic growth? Slide 15 of 25 ...
The Economic Consequences of Low Interest Rates
... the same time, given the financial disruptions which led to what is now widely called “the Great Recession”, the reduction of interest rates has helped to offset the excessive increase in borrowing costs caused by the widening of financial spreads. From this perspective, monetary policy actions have ...
... the same time, given the financial disruptions which led to what is now widely called “the Great Recession”, the reduction of interest rates has helped to offset the excessive increase in borrowing costs caused by the widening of financial spreads. From this perspective, monetary policy actions have ...
interest rate - Nimantha Manamperi, PhD
... 10. Many market participants and economists believe that, based on actual evidence, financial markets are not as rational as the efficient markets hypothesis claims. Such evidence includes the fact that stock price fluctuations are too great to be driven by fundamentals alone. Policy makers assume n ...
... 10. Many market participants and economists believe that, based on actual evidence, financial markets are not as rational as the efficient markets hypothesis claims. Such evidence includes the fact that stock price fluctuations are too great to be driven by fundamentals alone. Policy makers assume n ...
Are Workers' Enterprises entry policies conventional
... LM banks in developed and emerging countries contribute to equity and financial stability (Hesse and Cihàk, 2007): market share of some 10%. LMF close to (US Census) Nonemployer (Moretto and Rossini, 2007 - SEJ) and Partnership, popular among infant firms in high tech sectors Rossini - Unibo - A ...
... LM banks in developed and emerging countries contribute to equity and financial stability (Hesse and Cihàk, 2007): market share of some 10%. LMF close to (US Census) Nonemployer (Moretto and Rossini, 2007 - SEJ) and Partnership, popular among infant firms in high tech sectors Rossini - Unibo - A ...
Annamaria Simonazzi (Provisional) 1. Introduction: secular
... financially de-regulated setting, is more likely to produce bubbles rather than steady growth. Bubbles thus become the only way in which economies can grow. It is generally maintained that they can produce only short-run, temporary effects on demand, and negative, long-lasting effects on growth thro ...
... financially de-regulated setting, is more likely to produce bubbles rather than steady growth. Bubbles thus become the only way in which economies can grow. It is generally maintained that they can produce only short-run, temporary effects on demand, and negative, long-lasting effects on growth thro ...
Test#1
... Banks are one type of financial intermediaries but differ from others in that their liabilities in the form of checking and savings deposits are the most liquid of all assets in the economy. Other financial intermediaries do have (and create) liabilities, but these other instruments are not very liq ...
... Banks are one type of financial intermediaries but differ from others in that their liabilities in the form of checking and savings deposits are the most liquid of all assets in the economy. Other financial intermediaries do have (and create) liabilities, but these other instruments are not very liq ...
Japanese Economic Recovery and the Macroeconomic Policy Mix
... There is much cheer surrounding the Japanese economy finally reaching the end of the long and painful path of post bubble adjustments. As the signs of economic recovery spread from manufacturing to non-manufacturing industries, from large to small firms, and from metropolitan to regional areas, the ...
... There is much cheer surrounding the Japanese economy finally reaching the end of the long and painful path of post bubble adjustments. As the signs of economic recovery spread from manufacturing to non-manufacturing industries, from large to small firms, and from metropolitan to regional areas, the ...
Asset_Pricing_Theori..
... Stochastic discount factors • For stocks, Xit+1 = pit+1 + dit+1 (price + dividend) • For riskless asset if it exists Xit+1 = 1 + rf = Rf ...
... Stochastic discount factors • For stocks, Xit+1 = pit+1 + dit+1 (price + dividend) • For riskless asset if it exists Xit+1 = 1 + rf = Rf ...
How China helped create the macroeconomic backdrop for financial
... Over the past decade, China and other emerging markets accumulated foreign currency reserves to insure against the economic and political vagaries of financial globalisation. They were wise to do so. Countries with larger reserves are weathering the storm relatively better than those who have bought ...
... Over the past decade, China and other emerging markets accumulated foreign currency reserves to insure against the economic and political vagaries of financial globalisation. They were wise to do so. Countries with larger reserves are weathering the storm relatively better than those who have bought ...
The Failure of Macroeconomics in America
... assessment of climate change. We warned then, more than a decade and a half ago, of the serious threat posed by greenhouse gases. It is very clear that we need more research of the kind that one of this year’s award winners conducted (Chen et al., “Embodied energy in China’s foreign trade and policy ...
... assessment of climate change. We warned then, more than a decade and a half ago, of the serious threat posed by greenhouse gases. It is very clear that we need more research of the kind that one of this year’s award winners conducted (Chen et al., “Embodied energy in China’s foreign trade and policy ...
Op-Ed
... possibilities of wealth may run to waste for a time — perhaps for a long time.” So wrote John Maynard Keynes in an essay titled “The Great Slump of 1930,” in which he tried to explain the catastrophe then overtaking the world. And the world’s possibilities of wealth did indeed run to waste for a lo ...
... possibilities of wealth may run to waste for a time — perhaps for a long time.” So wrote John Maynard Keynes in an essay titled “The Great Slump of 1930,” in which he tried to explain the catastrophe then overtaking the world. And the world’s possibilities of wealth did indeed run to waste for a lo ...
How Did Economists Get It So Wrong?
... baby-sitting for one another‟s children when parents wanted a night out. To ensure that every couple did its fair share of baby-sitting, the co-op introduced a form of scrip: coupons made out of heavy pieces of paper, each entitling the bearer to one half-hour of sitting time. Initially, members rec ...
... baby-sitting for one another‟s children when parents wanted a night out. To ensure that every couple did its fair share of baby-sitting, the co-op introduced a form of scrip: coupons made out of heavy pieces of paper, each entitling the bearer to one half-hour of sitting time. Initially, members rec ...
The Working of Free Markets
... consumers who wish to buy it (Demand), along with firms who wish to sell it (Supply). A theory and model which predicts: (1) how much of the good will ultimately be sold, (2) the price it will sell for, and (3) how these conditions change due to specific events. ...
... consumers who wish to buy it (Demand), along with firms who wish to sell it (Supply). A theory and model which predicts: (1) how much of the good will ultimately be sold, (2) the price it will sell for, and (3) how these conditions change due to specific events. ...
Personal Finance Curriculum- Coginchaug Regional High School
... 1. Economists use a variety of calculated indicators to measure the performance of our economy 2. Analysis of these indicators is essential to understanding economic behavior and establishing stable economic policies 3. Business cycles are a natural part of economic existence Content Standards: 1. O ...
... 1. Economists use a variety of calculated indicators to measure the performance of our economy 2. Analysis of these indicators is essential to understanding economic behavior and establishing stable economic policies 3. Business cycles are a natural part of economic existence Content Standards: 1. O ...
How Did Economists Get It So Wrong?
... The result is that our possibilities of wealth may run to waste for a time — perhaps for a long time.” So wrote John Maynard Keynes in an essay titled “The Great Slump of 1930,” in which he tried to explain the catastrophe then overtaking the world. And the world’s possibilities of wealth did indee ...
... The result is that our possibilities of wealth may run to waste for a time — perhaps for a long time.” So wrote John Maynard Keynes in an essay titled “The Great Slump of 1930,” in which he tried to explain the catastrophe then overtaking the world. And the world’s possibilities of wealth did indee ...
Institute of Actuaries of India Subject CT7 – Business Economics INDICATIVE SOLUTION
... discount” system, as used in motor insurance) refusing to pay claims if you do not take reasonable care (many policies won’t pay up if you leave your house or car unlocked). [2 Marks] Solution 33: Speculation is where people make trading decisions based on expectations of future price movements. S ...
... discount” system, as used in motor insurance) refusing to pay claims if you do not take reasonable care (many policies won’t pay up if you leave your house or car unlocked). [2 Marks] Solution 33: Speculation is where people make trading decisions based on expectations of future price movements. S ...
FINANCIAL CRISES, RESERVE ACCUMULATION, AND CAPITAL FLOWS
... While inelasticity of price expectations in the asset market is a sufficient condition for equilibrium, it is obviously not a necessary condition. Even with unit elastic price expectations, equilibrium can still come about through what Keynes had called the “minor influence” of variations in the “ow ...
... While inelasticity of price expectations in the asset market is a sufficient condition for equilibrium, it is obviously not a necessary condition. Even with unit elastic price expectations, equilibrium can still come about through what Keynes had called the “minor influence” of variations in the “ow ...
Out of the corridor: Keynes and the crisis
... The American banks apparently increased their leverage substantially in the years preceding the crash. The large investment banks had leverage ratios in the high 20s or low 30s. Hedge funds and some European banks may have been even more highly levered. At leverage ratios in this range, a loss in as ...
... The American banks apparently increased their leverage substantially in the years preceding the crash. The large investment banks had leverage ratios in the high 20s or low 30s. Hedge funds and some European banks may have been even more highly levered. At leverage ratios in this range, a loss in as ...
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.