The Financial Accelerator in a Quantitative Business Cycle Framework
... The canonical real business cycle model and the textbook Keynesian IS-LM model differ in many fundamental ways. However, these two standard frameworks for macroeconomic analysis do share one strong implication: Except for the term structure of real interest rates, which, together with expectations o ...
... The canonical real business cycle model and the textbook Keynesian IS-LM model differ in many fundamental ways. However, these two standard frameworks for macroeconomic analysis do share one strong implication: Except for the term structure of real interest rates, which, together with expectations o ...
NBER WORKING PAPER SERIES ON THE OR IRRELEVANCE OF PUBLIC
... the effect of public financial policy on the relative prices of different assets does not arise. 2. The original papers by Tobin (1965) and Johnson (1966) gave rise to a large literature; see, for instance, Shell, Sidrauski, and Stiglitz (1967). Although much of this literature employed ad hoc savin ...
... the effect of public financial policy on the relative prices of different assets does not arise. 2. The original papers by Tobin (1965) and Johnson (1966) gave rise to a large literature; see, for instance, Shell, Sidrauski, and Stiglitz (1967). Although much of this literature employed ad hoc savin ...
Interest rates and financial integration - a long perspective on China
... rates set by the central bank or from the inter-bank market. Bank refers to loans from a modern bank. Trad_m_b refers to loans made by traditional financial institutions like money shops or Shanxi bankers. Pawn refers to capital from pawnshops. Commoner refers to personal loans between individual ci ...
... rates set by the central bank or from the inter-bank market. Bank refers to loans from a modern bank. Trad_m_b refers to loans made by traditional financial institutions like money shops or Shanxi bankers. Pawn refers to capital from pawnshops. Commoner refers to personal loans between individual ci ...
Chapter 7 The Rational Expectations Hypothesis Munroe Mark
... public is assumed to form expectations in period t about the price level that will prevail in t+ 1. If no actual price level is greater than anticipated representative producers will attribute part of this to an increase in their relative price level, increasing output. What this model then proposes ...
... public is assumed to form expectations in period t about the price level that will prevail in t+ 1. If no actual price level is greater than anticipated representative producers will attribute part of this to an increase in their relative price level, increasing output. What this model then proposes ...
Assessing Fiscal Policy in an Accrual Environment
... government. Indeed, the focus of standard accrual measures on current transactions, while a drawback for assessing economic impact, is an advantage for assessing financial sustainability. This is evident when considering the features of the two most common accrual measures: the operating balance and ...
... government. Indeed, the focus of standard accrual measures on current transactions, while a drawback for assessing economic impact, is an advantage for assessing financial sustainability. This is evident when considering the features of the two most common accrual measures: the operating balance and ...
chapter summary
... unemployment has fallen below the natural rate of unemployment, and the price level is higher than the level anticipated when wage contracts were negotiated. Therefore, as wages are renegotiated in the long run, they rise. The economy slides upward along AD' as higher wage rates cause short-run aggr ...
... unemployment has fallen below the natural rate of unemployment, and the price level is higher than the level anticipated when wage contracts were negotiated. Therefore, as wages are renegotiated in the long run, they rise. The economy slides upward along AD' as higher wage rates cause short-run aggr ...
The IS-LM/AD-AS Model: A General Framework for Macroeconomic
... – An increase in the growth rate of money relative to the growth rate of inflation. ...
... – An increase in the growth rate of money relative to the growth rate of inflation. ...
Intermediary Asset Pricing
... intermediaries’ actions reflect the preferences of their client-investors. With this assumption, the traditional approach treats intermediaries as a “veil,” and instead posits that a representative household is marginal in pricing all assets. We deviate from the traditional approach for two reasons. ...
... intermediaries’ actions reflect the preferences of their client-investors. With this assumption, the traditional approach treats intermediaries as a “veil,” and instead posits that a representative household is marginal in pricing all assets. We deviate from the traditional approach for two reasons. ...
1 Sample Questions for Microeconomics 1. Which of the following is
... 48. Suppose the government decides that every family should own its own home. To bring this about, the government decides to subsidize the home-construction industry by giving the home-construction companies $10,000 for every house that they build. As a result of this, a. the supply curve of new hou ...
... 48. Suppose the government decides that every family should own its own home. To bring this about, the government decides to subsidize the home-construction industry by giving the home-construction companies $10,000 for every house that they build. As a result of this, a. the supply curve of new hou ...
AS Economics Specification
... following this specification are at the discretion of centres. It is reasonable to assume that many learners will have achieved qualifications equivalent to Level 2 at KS4. Skills in Numeracy/Mathematics, Literacy/English and Information Communication Technology will provide a good basis for progres ...
... following this specification are at the discretion of centres. It is reasonable to assume that many learners will have achieved qualifications equivalent to Level 2 at KS4. Skills in Numeracy/Mathematics, Literacy/English and Information Communication Technology will provide a good basis for progres ...
research paper series Research Paper 2011/01
... A series of financial episodes over the last couple of decades has been responsible for the resurgence of interest on the impact of financial market integration on both emerging and developing economies. It has been argued that while there might be some short-run side effects, in the long-run financ ...
... A series of financial episodes over the last couple of decades has been responsible for the resurgence of interest on the impact of financial market integration on both emerging and developing economies. It has been argued that while there might be some short-run side effects, in the long-run financ ...
Macroeconomics II Lecture notes (2)
... (implicitly) assumed is essentially "adaptive": people (especially workers) form expectations about the price level (and therefore the real wage) on the basis of past experience, gradually "correcting" over time any past forecast error. The immediate consequence of this behavior is the possibility o ...
... (implicitly) assumed is essentially "adaptive": people (especially workers) form expectations about the price level (and therefore the real wage) on the basis of past experience, gradually "correcting" over time any past forecast error. The immediate consequence of this behavior is the possibility o ...
NBER WORKING PAPER SERIES THE INEXORABLE AND MYSTERIOUS TRADEOFF N. Gregory Mankiw
... experiencing excess demand. The most interesting regime--in the sense of corresponding best to what we observe during recessions--is the "Keynesian" regime in which both the goods market and the labor market exhibit excess supply. Unemployment arises because labor demand is low, which results becaus ...
... experiencing excess demand. The most interesting regime--in the sense of corresponding best to what we observe during recessions--is the "Keynesian" regime in which both the goods market and the labor market exhibit excess supply. Unemployment arises because labor demand is low, which results becaus ...
here - Hans-Böckler
... Larry Summers in a speech at the IMF on November 8, 2013. 3 The unexpected emergence of stagnation has prompted a search for a theoretical explanation. That search has now converged on the idea of the zero lower bound (ZLB) to nominal interest rates which supposedly obstructs clearing of the loanab ...
... Larry Summers in a speech at the IMF on November 8, 2013. 3 The unexpected emergence of stagnation has prompted a search for a theoretical explanation. That search has now converged on the idea of the zero lower bound (ZLB) to nominal interest rates which supposedly obstructs clearing of the loanab ...
Gauging the Impact of the Fed on Inequality During the Great
... commonly known as quantitative easing, increased inequality by driving up the price of stocks and other assets is misplaced. To the extent that the Fed pushed the economy closer to full employment, it reduced inequality. Critics of the Fed ignore the crucial “compared to what” question. Bivens compa ...
... commonly known as quantitative easing, increased inequality by driving up the price of stocks and other assets is misplaced. To the extent that the Fed pushed the economy closer to full employment, it reduced inequality. Critics of the Fed ignore the crucial “compared to what” question. Bivens compa ...
NBER WORKING PAPER SERIES ON THE IRRELEVANCE OF PUBLIC FINANCIAL POLICY
... explicitly assumed that all individuals are risk averse. In the portfolio balance models, the increase in government debt has real effects because individuals will not hold the additional government debt unless the return to debt relative to equities changes; but in these models, individuals are myo ...
... explicitly assumed that all individuals are risk averse. In the portfolio balance models, the increase in government debt has real effects because individuals will not hold the additional government debt unless the return to debt relative to equities changes; but in these models, individuals are myo ...
ECO 2301 Spring 2014 Sec 002 K. Becker QUIZ #9 Friday, March 7
... A. price controls keep prices low enough that most consumers can purchase the item. B. consumer surplus and producer surplus are equal. C. consumer surplus exceeds producer surplus. D. the market is in equilibrium. The areas of the triangles that measure consumer surplus and producer surplus are lar ...
... A. price controls keep prices low enough that most consumers can purchase the item. B. consumer surplus and producer surplus are equal. C. consumer surplus exceeds producer surplus. D. the market is in equilibrium. The areas of the triangles that measure consumer surplus and producer surplus are lar ...
On Misc. Topics
... Production possibility curve slopes downwards from left to right. It is because in a situation of fuller utilization of the given resources, production of both the goods can not be increased. More of good-Can be produced only with less of good-Y. • (2) 1)Production Possibility Curve is concave to th ...
... Production possibility curve slopes downwards from left to right. It is because in a situation of fuller utilization of the given resources, production of both the goods can not be increased. More of good-Can be produced only with less of good-Y. • (2) 1)Production Possibility Curve is concave to th ...
Paper - CiteSeerX
... The close association of the financial cycle with financial crises helps explain another empirical regularity: recessions that coincide with the contraction phase of the financial cycle are especially severe. On average, GDP drops by around 50% more than otherwise (Drehmann et al (2012)). This quali ...
... The close association of the financial cycle with financial crises helps explain another empirical regularity: recessions that coincide with the contraction phase of the financial cycle are especially severe. On average, GDP drops by around 50% more than otherwise (Drehmann et al (2012)). This quali ...
NBER WORKING PAPER SERIES DEPRESSION Peter F. Basile
... controls over private investment, would have to be used to promote expansion. In the General Theory Keynes (1965 [1936], 207) suggested that while a liquidity trap was an important theoretical possibility it had not yet arisen in the real world. There is the possibility, for reasons discussed above, ...
... controls over private investment, would have to be used to promote expansion. In the General Theory Keynes (1965 [1936], 207) suggested that while a liquidity trap was an important theoretical possibility it had not yet arisen in the real world. There is the possibility, for reasons discussed above, ...
RVI114Hermann_en.pdf
... needed to estimate asset risks and returns. Uncertainty, unlike risk, cannot be priced, i.e. cannot be factored into market interest rates. This makes it reasonable that there should normally be some preference for liquidity, as a way of protecting against unforeseeable risks. In Keynes’s view, the ...
... needed to estimate asset risks and returns. Uncertainty, unlike risk, cannot be priced, i.e. cannot be factored into market interest rates. This makes it reasonable that there should normally be some preference for liquidity, as a way of protecting against unforeseeable risks. In Keynes’s view, the ...
Presentation Plus!
... • After all, the person who receives a subsidy is more likely to support it than is the taxpayer who pays for it. • In general, it is usually wise to evaluate each situation on its own merits, as the benefits of a program may well exceed the costs. • What is common to all of these situations, ho ...
... • After all, the person who receives a subsidy is more likely to support it than is the taxpayer who pays for it. • In general, it is usually wise to evaluate each situation on its own merits, as the benefits of a program may well exceed the costs. • What is common to all of these situations, ho ...
Deflation fears in developed economies
... high cause a decline in consumption and capital investment. An inflation path below what was expected at the time of borrowing increases the real debt burden. If all debtors were able to avoid default, then income would be reallocated to creditors in a period of deflation. And since creditors tend t ...
... high cause a decline in consumption and capital investment. An inflation path below what was expected at the time of borrowing increases the real debt burden. If all debtors were able to avoid default, then income would be reallocated to creditors in a period of deflation. And since creditors tend t ...
NBER WORKING PAPER SERIES INFLATION: THEORY AND EVIDENCE Bennett 1. McCallum
... in the rate of money creation. The ...
... in the rate of money creation. The ...
I. 本年度特別關注事項 - Delia Memorial School (Hip Wo)
... - Uses and limitations of national income statistics as an indicator of economic welfare and for international comparison A. ...
... - Uses and limitations of national income statistics as an indicator of economic welfare and for international comparison A. ...
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.