28.1 money and the interest rate
... Increased uncertainty also misallocates resources. Instead of concentrating on the activities at which they have a comparative advantage, people find it more profitable to search for ways of avoiding the losses that inflation inflicts. Gains and losses occur because of unpredictable changes in the v ...
... Increased uncertainty also misallocates resources. Instead of concentrating on the activities at which they have a comparative advantage, people find it more profitable to search for ways of avoiding the losses that inflation inflicts. Gains and losses occur because of unpredictable changes in the v ...
How Richard Nixon Pressured Arthur Burns
... liquidity” in the banking sector, suggesting that there may be a problem of too much liquidity. Burns discusses the various critics of the Fed’s monetary policies, whose views of those policies range from too tight to “gone wild.” Burns seems to side with not needing much change in monetary policy: ...
... liquidity” in the banking sector, suggesting that there may be a problem of too much liquidity. Burns discusses the various critics of the Fed’s monetary policies, whose views of those policies range from too tight to “gone wild.” Burns seems to side with not needing much change in monetary policy: ...
Chapter 10: The Circular Flow Model
... case to $9 (20,000 times $9 = $180,000). What has happened to the real wage of the workers? The answer is that nothing has happened to it; the workers are not worse off at all. With a wage of $9 and a price of widgets of $18, they can buy just as many widgets as they could when they earned $10 but t ...
... case to $9 (20,000 times $9 = $180,000). What has happened to the real wage of the workers? The answer is that nothing has happened to it; the workers are not worse off at all. With a wage of $9 and a price of widgets of $18, they can buy just as many widgets as they could when they earned $10 but t ...
Exercises for Chapter 26
... b. investment and so shift the demand for loanable funds left. c. public saving and so shift the supply of loanable funds left. d. None of the above are correct. ANSWER: c. public saving and so shift the supply of loanable funds left. 18. An increase in the budget deficit would cause a a. shortage o ...
... b. investment and so shift the demand for loanable funds left. c. public saving and so shift the supply of loanable funds left. d. None of the above are correct. ANSWER: c. public saving and so shift the supply of loanable funds left. 18. An increase in the budget deficit would cause a a. shortage o ...
Setting the Stage for a National Currency in the West
... See McKinnon (2000) on the costly holding of reserves. Nonetheless, some countries with de facto floats are holding historically very high reserves. While countries may be able to generate interest on foreign reserves, the domestic economy does not see the benefits of these reserves. The opportunity ...
... See McKinnon (2000) on the costly holding of reserves. Nonetheless, some countries with de facto floats are holding historically very high reserves. While countries may be able to generate interest on foreign reserves, the domestic economy does not see the benefits of these reserves. The opportunity ...
NBER WORKING PAPER SERIES INFLATION: THEORY AND EVIDENCE Bennett 1. McCallum
... have behaved, over the postwar era, in a manner that has resulted in a many—fold increase in the price level in most industrialized nations. A full ...
... have behaved, over the postwar era, in a manner that has resulted in a many—fold increase in the price level in most industrialized nations. A full ...
NBER WORKING PAPER SERIES INFLATION AND LABOR—MARKET ADJUSTMENT Working Paper No. 1153
... in output across sectors be included along with measures of inflation or inflation uncertainty as independent variables in estimating equations describing the variance in relative wage changes. ...
... in output across sectors be included along with measures of inflation or inflation uncertainty as independent variables in estimating equations describing the variance in relative wage changes. ...
The Economics of Money, Banking, and Financial
... Answer: The Federal Reserve doesn't use an explicit nominal anchor such as a monetary aggregate or the inflation rate. Its strategy revolves around using an implicit nominal anchor in the form of an overriding concern to control inflation in the long run. This involves forward-looking behavior and " ...
... Answer: The Federal Reserve doesn't use an explicit nominal anchor such as a monetary aggregate or the inflation rate. Its strategy revolves around using an implicit nominal anchor in the form of an overriding concern to control inflation in the long run. This involves forward-looking behavior and " ...
MacroPractice
... e. currencies appreciate as often as they depreciate. ____ 24. There is a flexible exchange rate system and only two countries in the world, the United States and Mexico. The real interest rate in the United States rises relative to the real interest rate in Mexico. It follows that a. the dollar wil ...
... e. currencies appreciate as often as they depreciate. ____ 24. There is a flexible exchange rate system and only two countries in the world, the United States and Mexico. The real interest rate in the United States rises relative to the real interest rate in Mexico. It follows that a. the dollar wil ...
Non-Stationarity and Instability in Small Open
... pen economies are characterized by the ability to trade goods both intra- and intertemporally, that is, their residents can move goods and assets across borders and over time. These transactions are reflected in the current account, which measures the value of a country’s export and imports, and its ...
... pen economies are characterized by the ability to trade goods both intra- and intertemporally, that is, their residents can move goods and assets across borders and over time. These transactions are reflected in the current account, which measures the value of a country’s export and imports, and its ...
Estimating New Zealand’s neutral interest rate AN2015/05 September 2015
... percent currently. The mean of these indicators is 4.3 percent. The Bank currently judges that the nominal neutral 90-day interest rate sits at 4.5 percent - within the range of estimates and close to the mean of these estimates. This implies that current monetary policy settings are expansionary, a ...
... percent currently. The mean of these indicators is 4.3 percent. The Bank currently judges that the nominal neutral 90-day interest rate sits at 4.5 percent - within the range of estimates and close to the mean of these estimates. This implies that current monetary policy settings are expansionary, a ...
Inflation Targeting in South Africa: A VAR Analysis
... textbook, ISLM version (e.g., Mankiw (1997)) of the Mundell Fleming model of a small open economy. The LM curve has a vertical slope because the demand for money is assumed to depend only on the price of domestic goods and the interest rate is determined by the world interest rate. In this simple mo ...
... textbook, ISLM version (e.g., Mankiw (1997)) of the Mundell Fleming model of a small open economy. The LM curve has a vertical slope because the demand for money is assumed to depend only on the price of domestic goods and the interest rate is determined by the world interest rate. In this simple mo ...
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... believe that wages and prices are flexible, and that workers and consumers incorporate the likely consequences of government policy changes quickly into their ...
... believe that wages and prices are flexible, and that workers and consumers incorporate the likely consequences of government policy changes quickly into their ...
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... by the interaction of two characteristics of financing typical of middle income countries: asymmetric financing opportunities and risky currency mismatch in the balance sheets of banks and firms. While the T-sector has access to several sources of external finance, the N-sector is heavily dependent ...
... by the interaction of two characteristics of financing typical of middle income countries: asymmetric financing opportunities and risky currency mismatch in the balance sheets of banks and firms. While the T-sector has access to several sources of external finance, the N-sector is heavily dependent ...
Figure 8-12 Responses of the Inflation Rate (p)
... run equilibrium because the price level is constantly racing ahead of the nominal wage rage. There will be continuous pressures for higher wages. As labor contracts fail to anticipate further inflation, and as a result they fail to specify in advance the wage increases needed to keep up with infla ...
... run equilibrium because the price level is constantly racing ahead of the nominal wage rage. There will be continuous pressures for higher wages. As labor contracts fail to anticipate further inflation, and as a result they fail to specify in advance the wage increases needed to keep up with infla ...
Early 1980s recession
The early 1980s recession describes the severe global economic recession affecting much of the developed world in the late 1970s and early 1980s. The United States and Japan exited the recession relatively early, but high unemployment would continue to affect other OECD nations through to at least 1985. Long-term effects of the recession contributed to the Latin American debt crisis, the savings and loans crisis in the United States, and a general adoption of neoliberal economic policies throughout the 1980s and 1990s.