April/May 2015 by Thomas S. Moore, CFA
... rate of inflation, and we believe the Fed has the means to achieve it. Rightly or wrongly, its leaders believe they have the tools to contain inflation if it starts to accelerate too fast. That is a risky strategy but could turn out to be a good trade-off. Living through a short period of time with ...
... rate of inflation, and we believe the Fed has the means to achieve it. Rightly or wrongly, its leaders believe they have the tools to contain inflation if it starts to accelerate too fast. That is a risky strategy but could turn out to be a good trade-off. Living through a short period of time with ...
This PDF is a selection from a published volume from... Bureau of Economic Research
... The demand pressure variable in the price equation is the unemployment rate, and the cost shock variable is the price of imports. The nominal wage rate appears in the price equation, and the price level appears in the nominal wage equation. The price equation is discussed and tested against other sp ...
... The demand pressure variable in the price equation is the unemployment rate, and the cost shock variable is the price of imports. The nominal wage rate appears in the price equation, and the price level appears in the nominal wage equation. The price equation is discussed and tested against other sp ...
Avoiding some costs of inflation and crawling toward hyperinflation
... consideration of the g o v e r n m e n t ' s objectives and budget constraint (both represented by the central b a n k ' s reaction function). The households' aggregate financial wealth in period 1, W~, is entirely deposited at the b a n k in the form of d e m a n d deposits, M 1, 4 and m o n e y ma ...
... consideration of the g o v e r n m e n t ' s objectives and budget constraint (both represented by the central b a n k ' s reaction function). The households' aggregate financial wealth in period 1, W~, is entirely deposited at the b a n k in the form of d e m a n d deposits, M 1, 4 and m o n e y ma ...
Deflation: Economic Significance, Current Risk, and Policy
... Central banks would intervene, deficit country reducing the money supply and raising interest rates to slow the economy, push down the price level, and improve the competitiveness of domestic goods. International transmission of deflation is less likely within a regime of flexible exchange rates, as ...
... Central banks would intervene, deficit country reducing the money supply and raising interest rates to slow the economy, push down the price level, and improve the competitiveness of domestic goods. International transmission of deflation is less likely within a regime of flexible exchange rates, as ...
Econ 130
... – In the long run there is no con‡ict between the goals – In the short run it can con‡ict with the goals of high employment and interest-rate stability – Hierarchical mandate: put the goal of price stability …rst, and say that as long as its achieved other goals can be pursued. – Dual mandate: to ac ...
... – In the long run there is no con‡ict between the goals – In the short run it can con‡ict with the goals of high employment and interest-rate stability – Hierarchical mandate: put the goal of price stability …rst, and say that as long as its achieved other goals can be pursued. – Dual mandate: to ac ...
2005-12-08 Berlino DIW per la pubblicazione
... shock, there is a defined level of the interest rate which brings output back to its original level. The central bank just has to know the appropriate level at which the interest rate should be set to get back the economy on track. The problem with these linear models is that they do not allow for ...
... shock, there is a defined level of the interest rate which brings output back to its original level. The central bank just has to know the appropriate level at which the interest rate should be set to get back the economy on track. The problem with these linear models is that they do not allow for ...
A 200
... the Internal Revenue Service spends more than it collects in taxes in a given year c. the federal government spends more than it collects in taxes in a given year d. high levels of unemployment use up tax collections e. interest payments on the national debt increase from one year to the next ...
... the Internal Revenue Service spends more than it collects in taxes in a given year c. the federal government spends more than it collects in taxes in a given year d. high levels of unemployment use up tax collections e. interest payments on the national debt increase from one year to the next ...
GOVERNMENT PURCHASES AND N. Gregory Mankiw
... permanent change of similar size. Since Kx > 0, the stock of productive capital K also increases less in response to a temporary change. Because the real interest rate equals the net marginal product of capital, a temporary change in government spending has a smaller impact on the real rate than doe ...
... permanent change of similar size. Since Kx > 0, the stock of productive capital K also increases less in response to a temporary change. Because the real interest rate equals the net marginal product of capital, a temporary change in government spending has a smaller impact on the real rate than doe ...
Velocity of Money
... his position by seizing farms and turning them over to his political supporters. But because this seizure disrupted production, the result was to undermine the country’s economy and its tax base. It became impossible for the country’s government to balance its budget either by raising taxes or by cu ...
... his position by seizing farms and turning them over to his political supporters. But because this seizure disrupted production, the result was to undermine the country’s economy and its tax base. It became impossible for the country’s government to balance its budget either by raising taxes or by cu ...
A soft commitment to overshoot the inflation objective
... reference to the symmetric nature of the inflation target suggests that the FOMC is concerned about the risk of a premature tightening of financial and monetary conditions as inflation reaches the target: market participants could anticipate a more aggressive action coming from the FOMC thereby driv ...
... reference to the symmetric nature of the inflation target suggests that the FOMC is concerned about the risk of a premature tightening of financial and monetary conditions as inflation reaches the target: market participants could anticipate a more aggressive action coming from the FOMC thereby driv ...
econs pasco {econ 152} - chrisbonline.com
... c. is horizontal d. slopes upward and to the right 53. An appropriate fiscal policy for a severe recession would be a. a decrease in government spending b. a decrease in tax rates c. appreciation of the cedi d. an increase in interest rates 54. If the MPS (marginal propensity to save) in an economy ...
... c. is horizontal d. slopes upward and to the right 53. An appropriate fiscal policy for a severe recession would be a. a decrease in government spending b. a decrease in tax rates c. appreciation of the cedi d. an increase in interest rates 54. If the MPS (marginal propensity to save) in an economy ...
March 19, 2001
... ECONOMICS A02Y – INTRODUCTION TO ECONOMICS (A Mathematical Approach) Fourth In-Class Test: March 19, 2001 ...
... ECONOMICS A02Y – INTRODUCTION TO ECONOMICS (A Mathematical Approach) Fourth In-Class Test: March 19, 2001 ...
Speech to the Hong Kong Association of Northern California
... employees as they move to ramp down production. These production cuts will likely slow overall real GDP growth in the U.S. until the adjustment to a lower level is reached, most likely next year. Another factor restraining growth is the rise in interest rates over the past couple of years as the Fe ...
... employees as they move to ramp down production. These production cuts will likely slow overall real GDP growth in the U.S. until the adjustment to a lower level is reached, most likely next year. Another factor restraining growth is the rise in interest rates over the past couple of years as the Fe ...
Civics Review powerpoint
... was given up when an economic choice was made Can be time or money as well You always lose when faced with a trade off Production Possibilities: The combinations of goods and services that can be produced from a fixed amount of resources. (Guns vs. Butter or Computers vs. Food). ...
... was given up when an economic choice was made Can be time or money as well You always lose when faced with a trade off Production Possibilities: The combinations of goods and services that can be produced from a fixed amount of resources. (Guns vs. Butter or Computers vs. Food). ...
Questions of Final Provide explanation of 4 out of 10 principles of
... 17. Write quantity equation. For what purpose do we use it? and explain each variable in the equation. What is velocity and how can we derive it? 18. M=100; T=100; P=50; Real GDP=200. Find transaction velocity of money and income velocity of money. 19. 1 case-The Central Bank lowers the reserve requ ...
... 17. Write quantity equation. For what purpose do we use it? and explain each variable in the equation. What is velocity and how can we derive it? 18. M=100; T=100; P=50; Real GDP=200. Find transaction velocity of money and income velocity of money. 19. 1 case-The Central Bank lowers the reserve requ ...
Capital Inflow into Developing Economies: A Macroeconomic Study
... Over the past two decades the international economy has witnessed a dramatic upsurge in the flow of private funds to the emerging market economies of Asia and Latin America. India, in particular, has become a very attractive destination. Several factors have contributed towards this outcome. Most no ...
... Over the past two decades the international economy has witnessed a dramatic upsurge in the flow of private funds to the emerging market economies of Asia and Latin America. India, in particular, has become a very attractive destination. Several factors have contributed towards this outcome. Most no ...
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.