Fiscal Policy, Incentives, and Secondary Effects
... Supply-side Effects of Fiscal Policy • So, changes in marginal tax rates, particularly high marginal rates, may exert an impact on aggregate supply because they influence the relative attractiveness of productive activity compared to leisure and tax avoidance. • Supply-side policies are designed to ...
... Supply-side Effects of Fiscal Policy • So, changes in marginal tax rates, particularly high marginal rates, may exert an impact on aggregate supply because they influence the relative attractiveness of productive activity compared to leisure and tax avoidance. • Supply-side policies are designed to ...
Inflation and the Price of Real Assets ∗ Monika Piazzesi Martin Schneider
... boomers into asset markets directly lowered the average savings rate. Second, the erosion of bond portfolios by surprise inflation reduced the ratio of financial wealth to human wealth, which also gives rise to lower savings. Since there was only a small reduction in asset supply in the 1970s, the l ...
... boomers into asset markets directly lowered the average savings rate. Second, the erosion of bond portfolios by surprise inflation reduced the ratio of financial wealth to human wealth, which also gives rise to lower savings. Since there was only a small reduction in asset supply in the 1970s, the l ...
Secular Stagnation or Stagnation Policy? Steindl after Summers
... issue of long-run stagnation, or of “secular stagnation” (that is: low or even negative growth over a prolonged period of time), seems to be on the agenda (again) for academic economists, economic policy advisers, and policymaking institutions. Commonly, the start of the debate is associated with th ...
... issue of long-run stagnation, or of “secular stagnation” (that is: low or even negative growth over a prolonged period of time), seems to be on the agenda (again) for academic economists, economic policy advisers, and policymaking institutions. Commonly, the start of the debate is associated with th ...
completing conditions to implement monetary policy under inflation
... should also have a mechanism to ensure accountability and transparency of the central bank. The degree of transparency and consistency in regulating monetary policy plays an important role to gain public confidence. 1.2.2.5. Monetary policy credibility Public confidence towards commitments, manageme ...
... should also have a mechanism to ensure accountability and transparency of the central bank. The degree of transparency and consistency in regulating monetary policy plays an important role to gain public confidence. 1.2.2.5. Monetary policy credibility Public confidence towards commitments, manageme ...
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... (A1) Internal equilibrium prevails: The deviation u(t) of the rate of capacity utilization from its stationary mean is zero. (A2) There is external balance: ...
... (A1) Internal equilibrium prevails: The deviation u(t) of the rate of capacity utilization from its stationary mean is zero. (A2) There is external balance: ...
Andrs Solimano
... World Bank. Our thanks to Raimundo Soto and Yunyong Thaicharoen for their outstanding research assistance, to Sebastian Edwards for providing his data on political risk variables,and to Fischer Black, Olivier Blanchard, Michael Bruno, Ricardo Caballero, Jose de Gregorio, Janice Eberly, Stanley Fisch ...
... World Bank. Our thanks to Raimundo Soto and Yunyong Thaicharoen for their outstanding research assistance, to Sebastian Edwards for providing his data on political risk variables,and to Fischer Black, Olivier Blanchard, Michael Bruno, Ricardo Caballero, Jose de Gregorio, Janice Eberly, Stanley Fisch ...
The data are collected at a quarterly frequency, over a
... coming from this literature – where a monetary shock is typically a central bank-led change in the monetary base or equivalent to a money market interest rate – carry through also to a situation where “money” is measured by an endogenous, private sector-chosen broad monetary aggregate. ...
... coming from this literature – where a monetary shock is typically a central bank-led change in the monetary base or equivalent to a money market interest rate – carry through also to a situation where “money” is measured by an endogenous, private sector-chosen broad monetary aggregate. ...
NBER WORKING PAPER SERIES STABILIZATION POLICIES IN OPEN ECONOMIES Richard C. Marston
... by open market sales or purchases of securities or by other policy actions. Third, the financial sector is simplified considerably by the immobility of ...
... by open market sales or purchases of securities or by other policy actions. Third, the financial sector is simplified considerably by the immobility of ...
The Coming U.S. Interest Rate Tightening Cycle: Smooth Sailing or
... fluctuations in capital flows to EFEs. If the tightening cycle were accompanied by a surge in U.S. longterm yields, as happened during the taper tantrum, the reduction in capital flows to EFEs could be substantial (Figure 2). According to a vector autoregression model, a 100 basis point jump in U.S. ...
... fluctuations in capital flows to EFEs. If the tightening cycle were accompanied by a surge in U.S. longterm yields, as happened during the taper tantrum, the reduction in capital flows to EFEs could be substantial (Figure 2). According to a vector autoregression model, a 100 basis point jump in U.S. ...
Fiscal Volatility Shocks and Economic Activity
... was little consensus among policymakers about the fiscal mix and timing going forward.2 In this paper, we investigate whether this increased uncertainty about fiscal policy has a detrimental impact on economic activity (following the literature, we use the term “uncertainty” as shorthand for what wo ...
... was little consensus among policymakers about the fiscal mix and timing going forward.2 In this paper, we investigate whether this increased uncertainty about fiscal policy has a detrimental impact on economic activity (following the literature, we use the term “uncertainty” as shorthand for what wo ...
Business Cycles, Unemployment and Entrepreneurial Entry
... recessions. Also Francois and Lloyd-Ellis (2003) argue that entrepreneurs enter markets with innovative products when labor and production costs are low, i.e. during recessions or when unemployment is high. They will in particular enter during such times when they are able to store their innovations ...
... recessions. Also Francois and Lloyd-Ellis (2003) argue that entrepreneurs enter markets with innovative products when labor and production costs are low, i.e. during recessions or when unemployment is high. They will in particular enter during such times when they are able to store their innovations ...
A Practical Guide to Public Debt Dynamics, Fiscal
... The following formulas related to debt dynamics are based on the assumption that changes in liabilities are the result of above-the-line budgetary operations. This means that the debt path is determined by the path of overall fiscal balances (or primary balances and interest bill). In particular, th ...
... The following formulas related to debt dynamics are based on the assumption that changes in liabilities are the result of above-the-line budgetary operations. This means that the debt path is determined by the path of overall fiscal balances (or primary balances and interest bill). In particular, th ...
Economics 101 Assignment #3 (20 Points) Name
... By what percent did the GDP Deflator rise in 2006? _______________ What was the CPI for 2006? ________________ By what percent did the CPI rise in 2006? ________________ How do you account for the differences in the number and in the rise in prices between these two measures of inflation? 16. Go bac ...
... By what percent did the GDP Deflator rise in 2006? _______________ What was the CPI for 2006? ________________ By what percent did the CPI rise in 2006? ________________ How do you account for the differences in the number and in the rise in prices between these two measures of inflation? 16. Go bac ...
The Financial, Economic, Social, and Political
... at The United States Department of the Treasury in an examination of the financial, economic, social and political impacts of quantitative easing—has proved to be an unparalleled learning experience for us. Of course, none of this would have been possible without the Markets Room. We are especially ...
... at The United States Department of the Treasury in an examination of the financial, economic, social and political impacts of quantitative easing—has proved to be an unparalleled learning experience for us. Of course, none of this would have been possible without the Markets Room. We are especially ...
chapter - Princeton University
... Why deflation is a problem for economic policy and leads policy makers to prefer a low but positive inflation rate ...
... Why deflation is a problem for economic policy and leads policy makers to prefer a low but positive inflation rate ...
NBER WORKING PAPER SERIES Frederic S. Mishkin Working Paper 13566
... Over the past three decades, we have seen a remarkable change in the performance of monetary policy. By the end of the 1970s, inflation had risen to very high levels, with many countries in the Organisation for Economic Co-operation and Development (OECD) experiencing double-digit inflation rates ( ...
... Over the past three decades, we have seen a remarkable change in the performance of monetary policy. By the end of the 1970s, inflation had risen to very high levels, with many countries in the Organisation for Economic Co-operation and Development (OECD) experiencing double-digit inflation rates ( ...
Present Value of an Ordinary Annuity
... CALCULATOR: ((1 + .02) yX 12 – 1) ÷ .02 x 3,000 = 40,236.27 STO 1 1 + .02 x RCL 1 = 41,040.99 FINANCIAL CALCULATOR: Input 12 and then press N. Input 2 and then press I/Y. Input 0, and then press PV. Input 3,000 +/-, and then press PMT. Press CPT FV = 40,236.27 ...
... CALCULATOR: ((1 + .02) yX 12 – 1) ÷ .02 x 3,000 = 40,236.27 STO 1 1 + .02 x RCL 1 = 41,040.99 FINANCIAL CALCULATOR: Input 12 and then press N. Input 2 and then press I/Y. Input 0, and then press PV. Input 3,000 +/-, and then press PMT. Press CPT FV = 40,236.27 ...
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.