Some instability puzzles in Kaleckian models of growth and
... • ‘It is virtually impossible for the investmentsaving mechanism … to result in an optimal degree of capacity utilization…. It is, rather, expected, that the economy will generally exhibit smaller or larger margins of unutilized capacity over and above the difference between full and optimal capacit ...
... • ‘It is virtually impossible for the investmentsaving mechanism … to result in an optimal degree of capacity utilization…. It is, rather, expected, that the economy will generally exhibit smaller or larger margins of unutilized capacity over and above the difference between full and optimal capacit ...
Homework #5, Due Tuesday, Nov 14
... GDP decreases. The quantity of money does not change. What effect will the recession have on equilibrium interest rates? A) interest rates rise B) interest rates fall C) interest rates do not change D) there is not enough information to tell what happens to interest rates Answer: B ...
... GDP decreases. The quantity of money does not change. What effect will the recession have on equilibrium interest rates? A) interest rates rise B) interest rates fall C) interest rates do not change D) there is not enough information to tell what happens to interest rates Answer: B ...
Dominican_Republic_en.pdf
... As a result of these measures, nominal rates declined. Lending rates dropped from 23.94% to 13.82% over the 12 months ending in December 2009, and average deposit rates declined from 13.49% to 4.57% in the ...
... As a result of these measures, nominal rates declined. Lending rates dropped from 23.94% to 13.82% over the 12 months ending in December 2009, and average deposit rates declined from 13.49% to 4.57% in the ...
1) Gross domestic product is calculated by summing up A) the total
... A) Empirical evidence shows workers and firms have rational expectations. B) Contracts with workers and suppliers may hinder firms' abilities to adjust to price changes. C) Wages and prices may not adjust rapidly enough to keep the short-run Phillips curve vertical. D) Individuals may not be able to ...
... A) Empirical evidence shows workers and firms have rational expectations. B) Contracts with workers and suppliers may hinder firms' abilities to adjust to price changes. C) Wages and prices may not adjust rapidly enough to keep the short-run Phillips curve vertical. D) Individuals may not be able to ...
Sample Final Exam, Spring 2013
... 50. A former Governor of the Bank of Canada argued that interest rates must be increased in order to reduce inflation, and this would ultimately result in lower interest rates. This apparent contradiction can be explained by noting that a) higher interest rates in the short run put downward pressure ...
... 50. A former Governor of the Bank of Canada argued that interest rates must be increased in order to reduce inflation, and this would ultimately result in lower interest rates. This apparent contradiction can be explained by noting that a) higher interest rates in the short run put downward pressure ...
Economic Models The selection of variables
... autonomous spending is less sensitive to a change in the interest rate? • What happens to the slope of the IS curve if the leakage rate (slope of the leakage function) is increased? • How do autonomous changes (including fiscal policy) affect the IS curve? • How would President Bush’s tax plan affec ...
... autonomous spending is less sensitive to a change in the interest rate? • What happens to the slope of the IS curve if the leakage rate (slope of the leakage function) is increased? • How do autonomous changes (including fiscal policy) affect the IS curve? • How would President Bush’s tax plan affec ...
MONETARY AND FISCAL POLICIES
... How is the Monetary Policy different from the Fiscal Policy? • The Monetary Policy regulates the supply of money and the cost and availability of credit in the economy. It deals with both the lending and borrowing rates of interest for commercial banks. • The Monetary Policy aims to maintain price ...
... How is the Monetary Policy different from the Fiscal Policy? • The Monetary Policy regulates the supply of money and the cost and availability of credit in the economy. It deals with both the lending and borrowing rates of interest for commercial banks. • The Monetary Policy aims to maintain price ...
Modern Principles, Macroeconomics
... 2) Does an analysis of real shocks add to an analysis of aggregate demand shocks? Absolutely. In our view, a key problem with many textbooks is that they make fiscal and monetary policy look too easy. In the standard P,Y model the economy can always be restored to full employment by shifting the rig ...
... 2) Does an analysis of real shocks add to an analysis of aggregate demand shocks? Absolutely. In our view, a key problem with many textbooks is that they make fiscal and monetary policy look too easy. In the standard P,Y model the economy can always be restored to full employment by shifting the rig ...
Some instability puzzles in Kaleckian models of growth and
... • ‘It is virtually impossible for the investmentsaving mechanism … to result in an optimal degree of capacity utilization…. It is, rather, expected, that the economy will generally exhibit smaller or larger margins of unutilized capacity over and above the difference between full and optimal capacit ...
... • ‘It is virtually impossible for the investmentsaving mechanism … to result in an optimal degree of capacity utilization…. It is, rather, expected, that the economy will generally exhibit smaller or larger margins of unutilized capacity over and above the difference between full and optimal capacit ...
NOTES “JOSÉ DE MELLO SAÚDE 2014/2019” – PTJLLAOE0001
... Notice is hereby given to the holders of “JOSÉ DE MELLO SAÚDE 2014/2019” Notes that from December 9, 2016 there will be interest payment in relation to coupon number 5, with the following amounts: ...
... Notice is hereby given to the holders of “JOSÉ DE MELLO SAÚDE 2014/2019” Notes that from December 9, 2016 there will be interest payment in relation to coupon number 5, with the following amounts: ...
Flexibility in Monetary Policy Hakan Kara
... • Modify the existing inflation targeting regime to incorporate ...
... • Modify the existing inflation targeting regime to incorporate ...
Solutions for the selected problems:
... Decrease the reserve ratio: that would immediately free up reserves (create excess reserves) system wide. Banks could lend more expanding the money supply. Decrease the discount rate: encouraging banks to borrow reserves and lend more money, expanding the money supply. Buy government bonds: The Bank ...
... Decrease the reserve ratio: that would immediately free up reserves (create excess reserves) system wide. Banks could lend more expanding the money supply. Decrease the discount rate: encouraging banks to borrow reserves and lend more money, expanding the money supply. Buy government bonds: The Bank ...
° Money and Inflation Introduction Quantity Equation elQuantity
... The two real interest rates differ n actual inflation differs from cted inflation. • Thi changes our fisher equation. The nominal interest rate now depnds on expected future inflation. • So he nominal interest rate moves one for-one with the expected inflation rate. ...
... The two real interest rates differ n actual inflation differs from cted inflation. • Thi changes our fisher equation. The nominal interest rate now depnds on expected future inflation. • So he nominal interest rate moves one for-one with the expected inflation rate. ...
Word
... Monetary conditions were characterised by practically zero prices of money, which however did not enhance higher loans given the uncertainties for the business sector in anxiety over weak demand, for consumers then the distrust flowing from the worries related to the possible job losses and an adver ...
... Monetary conditions were characterised by practically zero prices of money, which however did not enhance higher loans given the uncertainties for the business sector in anxiety over weak demand, for consumers then the distrust flowing from the worries related to the possible job losses and an adver ...
Unemployment_inflation
... • Over any period, percentage change in a real value (%Δ Real) is approximately equal to percentage change in associated nominal value (%Δ Nominal) minus the rate of inflation %ΔReal = %ΔNominal – Rate of Inflation • If inflation is fully anticipated, and if both parties take it into account, then i ...
... • Over any period, percentage change in a real value (%Δ Real) is approximately equal to percentage change in associated nominal value (%Δ Nominal) minus the rate of inflation %ΔReal = %ΔNominal – Rate of Inflation • If inflation is fully anticipated, and if both parties take it into account, then i ...
Outlook for Financial Markets
... uncertainty and increasing the credibility of future actions by the Federal Reserve. The formula takes into account actual inflation to target inflation and potential GDP growth to current growth to determine an optimal target rate. Prior to the financial crisis, the fed funds rate generally tracked ...
... uncertainty and increasing the credibility of future actions by the Federal Reserve. The formula takes into account actual inflation to target inflation and potential GDP growth to current growth to determine an optimal target rate. Prior to the financial crisis, the fed funds rate generally tracked ...
Back to the Future: Revisiting the Scourge of Secular Stagnation
... What brought on this episode of secular stagnation? Summers offered a number of possible reasons. First, US population growth has been slowing, and the population is aging. The result is higher saving as aging households prepare for retirement, but also less need for investment as the number of work ...
... What brought on this episode of secular stagnation? Summers offered a number of possible reasons. First, US population growth has been slowing, and the population is aging. The result is higher saving as aging households prepare for retirement, but also less need for investment as the number of work ...
Chapter 34: Monetary and Fiscal Policy in a Global Setting
... that the United States is complaining about the actual negative consequences it experiences because of this policy, such as a higher trade deficit and possibly an artificially high value for the dollar, one can say the complaint is justified. If the argument centers on fairness, the issue is clearly ...
... that the United States is complaining about the actual negative consequences it experiences because of this policy, such as a higher trade deficit and possibly an artificially high value for the dollar, one can say the complaint is justified. If the argument centers on fairness, the issue is clearly ...
Fiscal and Monetary Policy
... The FED has three main functions, but only two that comprise monetary policy. 1. Serving the Government: Acts as the checking account for the Federal Government. 2. Regulating the Money Supply: When the government wants to speed up the economy (make it grow), it buys securities from banks. Because t ...
... The FED has three main functions, but only two that comprise monetary policy. 1. Serving the Government: Acts as the checking account for the Federal Government. 2. Regulating the Money Supply: When the government wants to speed up the economy (make it grow), it buys securities from banks. Because t ...
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.