M14_Gordon8014701_12_Macro_C14
... • In the 1930s, University of Chicago economist Henry Simons posed a stark contrast between a totally discretionary monetary policy and a fixed rule. – A Discretionary Policy treats each macroeconomic episode as a unique event without a common approach to all events. – A Rigid Rule for policy sets a ...
... • In the 1930s, University of Chicago economist Henry Simons posed a stark contrast between a totally discretionary monetary policy and a fixed rule. – A Discretionary Policy treats each macroeconomic episode as a unique event without a common approach to all events. – A Rigid Rule for policy sets a ...
MONETARY POLICY IN THE US BEFORE AND AFTER THE CRISIS
... Open Market Desk was unable to offset completely the increase in deposits of depository institutions because it lacked a sufficient volume of unencumbered Treasury securities. Subsequently, however, the FOMC adopted a near-zero target range for the federal funds rate, and so a very large volume of r ...
... Open Market Desk was unable to offset completely the increase in deposits of depository institutions because it lacked a sufficient volume of unencumbered Treasury securities. Subsequently, however, the FOMC adopted a near-zero target range for the federal funds rate, and so a very large volume of r ...
SIS Performance versus Benchmark to 31 March 2016
... term, it offers the prospects of high returns but with the likelihood that capital values will fluctuate broadly in line with the fortunes of the share markets. Typically, this strategy may be used as a return booster in conjunction with one of the other investment strategies. The objective of this ...
... term, it offers the prospects of high returns but with the likelihood that capital values will fluctuate broadly in line with the fortunes of the share markets. Typically, this strategy may be used as a return booster in conjunction with one of the other investment strategies. The objective of this ...
Municipal Bonds - Village of Homer Glen
... 1. What affects the interest rates on bonds? ANSWER: The length of the maturity, the credit worthiness of the borrower, the rating of the bond rating agencies, and alternative investments. Right now rates on municipal bonds are at their lowest in 15 years because all interest rates are low. There is ...
... 1. What affects the interest rates on bonds? ANSWER: The length of the maturity, the credit worthiness of the borrower, the rating of the bond rating agencies, and alternative investments. Right now rates on municipal bonds are at their lowest in 15 years because all interest rates are low. There is ...
The Tools of Monetary Policy
... This equation shows that the proportionate change in the price level equals the proportionate change in the quantity of money. This gives us the quantity theory of money: In the long run, the percentage increase in the price level equals the percentage increase in the quantity of money. ...
... This equation shows that the proportionate change in the price level equals the proportionate change in the quantity of money. This gives us the quantity theory of money: In the long run, the percentage increase in the price level equals the percentage increase in the quantity of money. ...
Subprime mortgage lending has grown tremendously
... to borrowers with high credit risk, that is, the risk that the borrower will not fully repay the lender. A lender may view a borrower as presenting a high level of credit risk because his credit history is impaired or not very long, or because he carries a large amount of debt relative to his income ...
... to borrowers with high credit risk, that is, the risk that the borrower will not fully repay the lender. A lender may view a borrower as presenting a high level of credit risk because his credit history is impaired or not very long, or because he carries a large amount of debt relative to his income ...
Interest rates and fiscal sustainability
... printing money or by borrowing. Sustained reliance on printing money to finance deficits can lead to escalating price inflation, which can have debilitating consequences. (Auerbach et al., 2003, p. ...
... printing money or by borrowing. Sustained reliance on printing money to finance deficits can lead to escalating price inflation, which can have debilitating consequences. (Auerbach et al., 2003, p. ...
10_Floating
... because central banks were unwilling to continue to buy over-valued dollar assets and to sell under-valued foreign currency assets. • Central banks thought they would stop trading in the foreign exchange for a while, and would let exchange rates adjust to supply and demand, and then would re-impose ...
... because central banks were unwilling to continue to buy over-valued dollar assets and to sell under-valued foreign currency assets. • Central banks thought they would stop trading in the foreign exchange for a while, and would let exchange rates adjust to supply and demand, and then would re-impose ...
The demand for loanable funds
... • Mutual Funds – A mutual fund is an institution that sells shares to the public and uses the proceeds to buy a portfolio, of various types of stocks, bonds, or both. • The primary advantage of mutual funds is that they allow people with small amounts of money to easily diversify. • The second advan ...
... • Mutual Funds – A mutual fund is an institution that sells shares to the public and uses the proceeds to buy a portfolio, of various types of stocks, bonds, or both. • The primary advantage of mutual funds is that they allow people with small amounts of money to easily diversify. • The second advan ...
Saving and Investment
... • Time of maturity - at which the loan will be repaid • Rate of interest • Principal - amount borrowed • Term - length of time until maturity • Credit risk • Tax treatment ...
... • Time of maturity - at which the loan will be repaid • Rate of interest • Principal - amount borrowed • Term - length of time until maturity • Credit risk • Tax treatment ...
Lecture Presentation to accompany Investment Analysis
... Sometime, you may have more money than you want to spend, at the other times, you want to buy more than you can afford. Borrow or save to maximalise long-run benefits from you income. When your income exceeds current consumption, people tend to invest income. Trade-off of present consumption for a ...
... Sometime, you may have more money than you want to spend, at the other times, you want to buy more than you can afford. Borrow or save to maximalise long-run benefits from you income. When your income exceeds current consumption, people tend to invest income. Trade-off of present consumption for a ...
Bangladeshi Money Supply And Equity Returns: A Co-Integration Analysis:
... react to noteworthy news events by adjusting their investment portfolios because these events change the risk-return profile of securities. Therefore, changes in the money supply, particularly M1 money, are important indicators of changes in future macroeconomic conditions such as inflation, interes ...
... react to noteworthy news events by adjusting their investment portfolios because these events change the risk-return profile of securities. Therefore, changes in the money supply, particularly M1 money, are important indicators of changes in future macroeconomic conditions such as inflation, interes ...
Bank of England Inflation Report May 2010
... The fan chart depicts the probability of various outcomes for GDP growth. It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves remains at £200 billion throughout the forecast period. To the left of the first vertical dashed li ...
... The fan chart depicts the probability of various outcomes for GDP growth. It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves remains at £200 billion throughout the forecast period. To the left of the first vertical dashed li ...
Demand-side and Supply
... • Government might want to cut spending, but many programs are protected by law, so this may not be easy to do either ...
... • Government might want to cut spending, but many programs are protected by law, so this may not be easy to do either ...
Homework section 2.2 In problems 1
... b) Use a graphing utility to find the line of best fit to the data. Express the solution using function notation. c) Interpret the slope. The slope of this line is called the margin propensity to consume. d) Predict the per capita consumption in a year where disposable income is ...
... b) Use a graphing utility to find the line of best fit to the data. Express the solution using function notation. c) Interpret the slope. The slope of this line is called the margin propensity to consume. d) Predict the per capita consumption in a year where disposable income is ...
ECON 300 Fall 2007 Midterm Essay 1. (30 points) In the general
... B. remain constant because saving and investment would not change. C. fall because the real exchange rate would rise. D. rise because the real exchange rate would fall. 17. A competitive firm rents capital until the marginal product of capital equals the A. real wage. B. rental price of capital. C. ...
... B. remain constant because saving and investment would not change. C. fall because the real exchange rate would rise. D. rise because the real exchange rate would fall. 17. A competitive firm rents capital until the marginal product of capital equals the A. real wage. B. rental price of capital. C. ...
19. The World of International Finance
... APPLYING THE CONCEPTS #4: What are the causes of financial collapses that occur throughout the globe? During the late 1980s, Argentina suffered from hyperinflation. As part of its financial reforms, it pegged its currency to the U.S. dollar, making pesos “convertible” into dollars. To issue pesos, t ...
... APPLYING THE CONCEPTS #4: What are the causes of financial collapses that occur throughout the globe? During the late 1980s, Argentina suffered from hyperinflation. As part of its financial reforms, it pegged its currency to the U.S. dollar, making pesos “convertible” into dollars. To issue pesos, t ...
The 'Sense and Nonsense of Maastricht' revisited: What have we learnt about stabilization in EMU?
... annum deemed a possibility in the future), 1.2 to 1.5 percent per annum for Poland, 1.9 percent per annum for Hungary and 1.6 percent per annum for the Czech Republic. All these estimates have the obvious shortcoming that they are based on very short datasets that do not allow the authors to filter ...
... annum deemed a possibility in the future), 1.2 to 1.5 percent per annum for Poland, 1.9 percent per annum for Hungary and 1.6 percent per annum for the Czech Republic. All these estimates have the obvious shortcoming that they are based on very short datasets that do not allow the authors to filter ...
Interest rate
An interest rate is the rate at which interest is paid by borrowers (debtors) for the use of money that they borrow from lenders (creditors). Specifically, the interest rate is a percentage of principal paid a certain number of times per period for all periods during the total term of the loan or credit. Interest rates are normally expressed as a percentage of the principal for a period of one year, sometimes they are expressed for different periods such as a month or a day. Different interest rates exist parallelly for the same or comparable time periods, depending on the default probability of the borrower, the residual term, the payback currency, and many more determinants of a loan or credit. For example, a company borrows capital from a bank to buy new assets for its business, and in return the lender receives rights on the new assets as collateral and interest at a predetermined interest rate for deferring the use of funds and instead lending it to the borrower.Interest-rate targets are a vital tool of monetary policy and are taken into account when dealing with variables like investment, inflation, and unemployment. The central banks of countries generally tend to reduce interest rates when they wish to increase investment and consumption in the country's economy. However, a low interest rate as a macro-economic policy can be risky and may lead to the creation of an economic bubble, in which large amounts of investments are poured into the real-estate market and stock market. In developed economies, interest-rate adjustments are thus made to keep inflation within a target range for the health of economic activities or cap the interest rate concurrently with economic growth to safeguard economic momentum.