The Case for NGDP Targeting
... severe financial panic. This led to a sharp fall in aggregate demand and the deep slump which afflicted most of the developed world. A closer look at the timeline does not support the standard view. Roughly 70% of the decline in housing starts in the US occurred between January 2006 and April 2008, ...
... severe financial panic. This led to a sharp fall in aggregate demand and the deep slump which afflicted most of the developed world. A closer look at the timeline does not support the standard view. Roughly 70% of the decline in housing starts in the US occurred between January 2006 and April 2008, ...
algierslessprocyclical
... A second specific example, in the case of monetary policy, is Inflation Targeting. The first countries to adopt IT were rich countries: New Zealand, Canada, Sweden and the United Kingdom. Beginning around 1999, many middle-sized middle-income developing countries followed suit. IT became the new con ...
... A second specific example, in the case of monetary policy, is Inflation Targeting. The first countries to adopt IT were rich countries: New Zealand, Canada, Sweden and the United Kingdom. Beginning around 1999, many middle-sized middle-income developing countries followed suit. IT became the new con ...
NBER WORKING PAPER SERIES REAL BUSINESS CYCLES AND THE LUCAS PARADIGM
... the Macroeconomics Workshop at UNC-Chapel Hill, as well as from comments by Charles Plosser, Richard Sweeney, and an anonymous referee. The usual disclaimer applies. The research reported here is part of the NBERs research programs in Financial Markets and Monetary Economics and Economic Fluctuation ...
... the Macroeconomics Workshop at UNC-Chapel Hill, as well as from comments by Charles Plosser, Richard Sweeney, and an anonymous referee. The usual disclaimer applies. The research reported here is part of the NBERs research programs in Financial Markets and Monetary Economics and Economic Fluctuation ...
GDP - One Student to Another
... 17) First, we must decide which goods to include in the calculation of GDP. GDP is defined as the money value of final goods and services produced. Since steel is included in the production of autos, it is an intermediate good, not a final good. So steel should be excluded from the calculation. Fina ...
... 17) First, we must decide which goods to include in the calculation of GDP. GDP is defined as the money value of final goods and services produced. Since steel is included in the production of autos, it is an intermediate good, not a final good. So steel should be excluded from the calculation. Fina ...
Money Growth and Inflation
... Since money creation leads to inflation, the inflation tax refers to the revenue that the government raises through money creation. Historically, many cases of hyperinflation occur during or after a war, w ...
... Since money creation leads to inflation, the inflation tax refers to the revenue that the government raises through money creation. Historically, many cases of hyperinflation occur during or after a war, w ...
The Debate over Monetary and Fiscal Policy
... • Quantity Theory of Money: MV=PY • Monetarism: inflation is always a monetary phenomenon • Debate over monetary and fiscal policy – Should we reply on Mon or Fis policy? – Should Fed control M or r? – AS curve is flat or steep? ...
... • Quantity Theory of Money: MV=PY • Monetarism: inflation is always a monetary phenomenon • Debate over monetary and fiscal policy – Should we reply on Mon or Fis policy? – Should Fed control M or r? – AS curve is flat or steep? ...
Economic Growth, Business Cycles, Unemployment, and Inflation
... Expectations of inflation play an important role in the inflation process. Inflationary expectations can accelerate large inflation. ...
... Expectations of inflation play an important role in the inflation process. Inflationary expectations can accelerate large inflation. ...
ECON 545 Week 6 Quiz
... costs little, then a relatively small price increase may be enough to encourage existing or new producers to ramp-up their production levels to provide additional supply to meet increased consumer demand. However, setting up a new production unit for gasoline is costly set-up for a producer. He has ...
... costs little, then a relatively small price increase may be enough to encourage existing or new producers to ramp-up their production levels to provide additional supply to meet increased consumer demand. However, setting up a new production unit for gasoline is costly set-up for a producer. He has ...
A Mixed Industrial Structure Magnifies the Importance of Menu Costs∗
... depends critically on the elasticity of labour supply with respect to the real wage being large enough. Evidence on individual labour supply suggests, however, a small elasticity.” (Blanchard & Kiyotaki 1987, pp. 369). In this paper we look at the effects of nominal disturbances in the context of men ...
... depends critically on the elasticity of labour supply with respect to the real wage being large enough. Evidence on individual labour supply suggests, however, a small elasticity.” (Blanchard & Kiyotaki 1987, pp. 369). In this paper we look at the effects of nominal disturbances in the context of men ...
Présentation PowerPoint - McGraw Hill Higher Education
... o New Keynesian Models: Generally rely on an assumption of imperfect competition. New Keynesian models explain how individually rational decisions under imperfect competition lead to a socially undesirable booms and busts. o Mankiw’s Model: Explains why individual, imperfectly competitive firms migh ...
... o New Keynesian Models: Generally rely on an assumption of imperfect competition. New Keynesian models explain how individually rational decisions under imperfect competition lead to a socially undesirable booms and busts. o Mankiw’s Model: Explains why individual, imperfectly competitive firms migh ...
Output and the Exchange Rate in the Short Run
... Does not behave in the same manner as an ordinary demand curve Price of product falls ...
... Does not behave in the same manner as an ordinary demand curve Price of product falls ...
GDP: What is it?
... goods and services based on year 2001 prices. Those same goods and services are instead valued at $105B if year 2000 prices are used. Then: – Year 2001 Nominal GDP = $110B, Real GDP = $105B Nominal GDP Growth Rate = 10% Real GDP Growth Rate = 5% ...
... goods and services based on year 2001 prices. Those same goods and services are instead valued at $105B if year 2000 prices are used. Then: – Year 2001 Nominal GDP = $110B, Real GDP = $105B Nominal GDP Growth Rate = 10% Real GDP Growth Rate = 5% ...
Chapter 16 - UCSB Economics
... 2) Could have increased government expenditure. But why do this? It takes longer, and improves Y through a different channel. It is ideally better to work through the same channel through which the shock arose. d) Inflation bias and other problems with policy formulation It’s not always so easy. In ...
... 2) Could have increased government expenditure. But why do this? It takes longer, and improves Y through a different channel. It is ideally better to work through the same channel through which the shock arose. d) Inflation bias and other problems with policy formulation It’s not always so easy. In ...
Monetary LECTURE NOTES 1
... According to the classicals, the wages also adjust instantaneously, and this leads to full employment at all levels of price. In fact, they assume full employment. Equilibrium: The classical supply curve is vertical. If the aggregate demand falls, then the prices fall, but the total output and emplo ...
... According to the classicals, the wages also adjust instantaneously, and this leads to full employment at all levels of price. In fact, they assume full employment. Equilibrium: The classical supply curve is vertical. If the aggregate demand falls, then the prices fall, but the total output and emplo ...
macroeconomics with non-perfect competition: tax cuts and wage
... whose elasticities are otherwise related in a particular way), if firms expect no price response then changes in aggregate demand affect only real variables, confirming expectations. However, since this set of conditions is stringent, Ng himself notes that it is unsafe to advocate expansionary polic ...
... whose elasticities are otherwise related in a particular way), if firms expect no price response then changes in aggregate demand affect only real variables, confirming expectations. However, since this set of conditions is stringent, Ng himself notes that it is unsafe to advocate expansionary polic ...
Economic Letter - Central Bank Communication Must Overcome the
... Based on research on public signaling and communication, three principal results emerge regarding the length of central bank messages.3 First, following economic shocks, a central bank can exploit interactions between output (typically shown as a change to the gross domestic product (GDP)) and infla ...
... Based on research on public signaling and communication, three principal results emerge regarding the length of central bank messages.3 First, following economic shocks, a central bank can exploit interactions between output (typically shown as a change to the gross domestic product (GDP)) and infla ...
Ch 2: C 1-8
... The GDP-deflator is a price index that covers the average price increase of all final goods and services currently produced within an economy. It is defined as the ratio of nominal GDP to real GDP. Nominal GDP is measured in current dollars, while real GDP is measured in socalled base-year dollars. ...
... The GDP-deflator is a price index that covers the average price increase of all final goods and services currently produced within an economy. It is defined as the ratio of nominal GDP to real GDP. Nominal GDP is measured in current dollars, while real GDP is measured in socalled base-year dollars. ...
CHAPTER 1
... a. The long-run aggregate supply curve is vertical. b. The short-run aggregate supply curve is downward sloping. c. There is always a direct relationship between the overall price level and the quantity of real output that will be demanded. d. Aggregate supply is the amount of output that firms will ...
... a. The long-run aggregate supply curve is vertical. b. The short-run aggregate supply curve is downward sloping. c. There is always a direct relationship between the overall price level and the quantity of real output that will be demanded. d. Aggregate supply is the amount of output that firms will ...
The CPI and the Cost of Living C H A P T E R C H E C K L I S T
... CHAPTER CHECKLIST When you have completed your study of this chapter, you will be able to ...
... CHAPTER CHECKLIST When you have completed your study of this chapter, you will be able to ...
15.2 THE CPI AND OTHER PRICE LEVEL MEASURES The
... CHAPTER CHECKLIST When you have completed your study of this chapter, you will be able to ...
... CHAPTER CHECKLIST When you have completed your study of this chapter, you will be able to ...
Deflation and Japan Revisited
... conceivable that in the short run, these magnitudes might move in opposite directions. It is of course also perfectly conceivable that changes in aggregate demand and aggregate supply could have a mutually offsetting influence on prices, as well as one of the two dominate in any particular instance. ...
... conceivable that in the short run, these magnitudes might move in opposite directions. It is of course also perfectly conceivable that changes in aggregate demand and aggregate supply could have a mutually offsetting influence on prices, as well as one of the two dominate in any particular instance. ...
Introduction to Macroeconomics 1012 Practise Mid-Term
... 5) Any two individuals will gain from exchange A) unless one has an absolute advantage in producing all goods. B) if each specializes in the production of the good for which he has the higher opportunity cost. C) unless they have the same opportunity costs for producing all goods. D) unless they hav ...
... 5) Any two individuals will gain from exchange A) unless one has an absolute advantage in producing all goods. B) if each specializes in the production of the good for which he has the higher opportunity cost. C) unless they have the same opportunity costs for producing all goods. D) unless they hav ...