Chapter 1: Introduction
... much. People fear a deep recession much more than they appear to value an extra four years' worth of economic growth. For example, the memory of the 1982 recession has substantially altered Americans’ perceptions of how the economy works, how much they dare risk in the search for higher wages, and h ...
... much. People fear a deep recession much more than they appear to value an extra four years' worth of economic growth. For example, the memory of the 1982 recession has substantially altered Americans’ perceptions of how the economy works, how much they dare risk in the search for higher wages, and h ...
Nominal GDP Targeting Rules: Can They Stabilize the Economy?
... For example, sluggish money growth was seen to signal a slowdown in real GDP growth. As a result, easing monetary policy when money growth fell below target helped moderate declines in real GDP growth. The targets for the monetary aggregates were also expected to help policymakers achieve long-term ...
... For example, sluggish money growth was seen to signal a slowdown in real GDP growth. As a result, easing monetary policy when money growth fell below target helped moderate declines in real GDP growth. The targets for the monetary aggregates were also expected to help policymakers achieve long-term ...
NBER WORKING PAPER SERIES OPTIMAL SIMPLE AND IMPLEMENTABLE MONETARY Stephanie Schmitt-Grohé
... ζt (mht − ν h ct ) = 0 ζt ≥ 0 It is apparent from these first-order conditions that the income tax distorts both the leisurelabor choice and the decision to accumulate capital over time. At the same time, the opportunity cost of holding money, 1/(1 − ζt ), which, as will become clear below equals th ...
... ζt (mht − ν h ct ) = 0 ζt ≥ 0 It is apparent from these first-order conditions that the income tax distorts both the leisurelabor choice and the decision to accumulate capital over time. At the same time, the opportunity cost of holding money, 1/(1 − ζt ), which, as will become clear below equals th ...
Exit Strategy - Centre for Economic Policy Research
... scholarly articles on such topics as fiscal policy, central banking, offshoring, and the distribution of income. Thomas J. Jordan is Chairman of the Governing Board of the Swiss National Bank and Head of Department I in Zurich (Economic Affairs, International Monetary Cooperation, Legal and Property ...
... scholarly articles on such topics as fiscal policy, central banking, offshoring, and the distribution of income. Thomas J. Jordan is Chairman of the Governing Board of the Swiss National Bank and Head of Department I in Zurich (Economic Affairs, International Monetary Cooperation, Legal and Property ...
WHY THE FEDERAL RESERVE SHOULD ADOPT INFLATION TARGETING
... on its head. I would argue that inflation targeting can actually make it easier to reduce output fluctuations and probably has done so. First the presence of an inflation target which provides an effective nominal anchor enables a central bank to be even more aggressive in the face of negative shoc ...
... on its head. I would argue that inflation targeting can actually make it easier to reduce output fluctuations and probably has done so. First the presence of an inflation target which provides an effective nominal anchor enables a central bank to be even more aggressive in the face of negative shoc ...
Macroeconomics - University of London International Programmes
... The IS–LM model: key assumptions............................................................................... 15 The IS–LM model: behavioural equations and identities................................................. 16 Income accounting in a closed economy.......................................... ...
... The IS–LM model: key assumptions............................................................................... 15 The IS–LM model: behavioural equations and identities................................................. 16 Income accounting in a closed economy.......................................... ...
Optimal Monetary Policy in a Currency Union: Implications of a
... …rms must borrow at the beginning of a period from …nancial intermediaries. Financial intermediaries receive deposits from households and supply loans to …rms at the nominal interest rate Rtl . For simplicity we can approximate the lending rate Rtl by the policycontrolled risk-free interest rate Rt ...
... …rms must borrow at the beginning of a period from …nancial intermediaries. Financial intermediaries receive deposits from households and supply loans to …rms at the nominal interest rate Rtl . For simplicity we can approximate the lending rate Rtl by the policycontrolled risk-free interest rate Rt ...
Liquidity, Investor-Level Tax Rates, and Expected Rates of
... residual cash payment (this expression follows from the discussion of capital gains tax in Sikes and Verrecchia 2011); and 1 + (1 ...
... residual cash payment (this expression follows from the discussion of capital gains tax in Sikes and Verrecchia 2011); and 1 + (1 ...
Guidance Note
... 21. In the case of residual currencies (refer Paragraph 13 above) the gross positions in each time band will be subject to either the risk weightings set out in Table 2, if positions are reported using the maturity method, or the assumed changes in yield set out in Table 2, if positions are reported ...
... 21. In the case of residual currencies (refer Paragraph 13 above) the gross positions in each time band will be subject to either the risk weightings set out in Table 2, if positions are reported using the maturity method, or the assumed changes in yield set out in Table 2, if positions are reported ...
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
... for each share of MFC's outstanding common stock at closing, subject to certain adjustments based on changes in FBS stock price. Based on current outstanding MFC shares, approximately 21.4 million shares would be issued. The transaction, which will be accounted for using the pooling-of-interests met ...
... for each share of MFC's outstanding common stock at closing, subject to certain adjustments based on changes in FBS stock price. Based on current outstanding MFC shares, approximately 21.4 million shares would be issued. The transaction, which will be accounted for using the pooling-of-interests met ...
Unconventional Fiscal Policy at the Zero Bound
... major recession at the zero bound (Section V). The intuition for why tax policy can neutralize the effects of the zero bound constraint is simple. Suppose real rates ought to be negative. Since the nominal interest rate cannot be negative, the only way to achieve negative real interest rates is to ge ...
... major recession at the zero bound (Section V). The intuition for why tax policy can neutralize the effects of the zero bound constraint is simple. Suppose real rates ought to be negative. Since the nominal interest rate cannot be negative, the only way to achieve negative real interest rates is to ge ...
NBER WORKING PAPER SERIES UNINSURED IDIOSYNCRATIC INVESTMENT RISK AND AGGREGATE SAVING George-Marios Angeletos
... Stacchetti (2000). In these models, investment risk is known to have a positive effect on savings and growth when the elasticity of intertemporal substitution is less than one, but this is only because the income share of capital is one.3 In the benchmark model, the entire capital stock is held in pr ...
... Stacchetti (2000). In these models, investment risk is known to have a positive effect on savings and growth when the elasticity of intertemporal substitution is less than one, but this is only because the income share of capital is one.3 In the benchmark model, the entire capital stock is held in pr ...
Keynes` Theory of Money and His Attack on the Classical Model
... His theory of money emerged from his rejection of the loanable funds and quantity theories and in so doing was the key to eliminating the classical dichotomy from his own analysis of the determination of income and employment. In both his rejection of the loanable funds theory of interest rate deter ...
... His theory of money emerged from his rejection of the loanable funds and quantity theories and in so doing was the key to eliminating the classical dichotomy from his own analysis of the determination of income and employment. In both his rejection of the loanable funds theory of interest rate deter ...
inflation - WordPress.com
... savings to invest them, rather than have the purchasing power of those savings erode through inflation. In investing, inflation risks often cause investors to take on more systematic risk, in order to gain returns that will stay ahead of expected inflation.[citation needed] Inflation also gives cent ...
... savings to invest them, rather than have the purchasing power of those savings erode through inflation. In investing, inflation risks often cause investors to take on more systematic risk, in order to gain returns that will stay ahead of expected inflation.[citation needed] Inflation also gives cent ...
An Introduction to Basic Macroeconomic Markets (15th ed.)
... to the production of goods the firm expects to sell at a profit. • The demand curve for resources slopes down and to the right. • Supply of Resources: Households supply resources in exchange for income. • Higher prices increase the incentive to supply resources; thus, the supply curve slopes up and ...
... to the production of goods the firm expects to sell at a profit. • The demand curve for resources slopes down and to the right. • Supply of Resources: Households supply resources in exchange for income. • Higher prices increase the incentive to supply resources; thus, the supply curve slopes up and ...
MERCATUS GRADUATE POLICY ESSAY
... see, these manipulated interest rates understate actual loan risk, which implies ―malinvestment‖ and subsequent future loan failures in an Austrian sense. Total private debt therefore increases between business cycles and much of this artificially created debt resolves in the deleveraging of bad loa ...
... see, these manipulated interest rates understate actual loan risk, which implies ―malinvestment‖ and subsequent future loan failures in an Austrian sense. Total private debt therefore increases between business cycles and much of this artificially created debt resolves in the deleveraging of bad loa ...
Why has inflation in New Zealand been low?
... eroded only gradually. This excess capacity resulted in subdued pressures on the price of productive resources, dampening non-tradables inflation. These subdued pressures have been particularly evident in the labour market, with subdued labour demand resulting in belowaverage employment growth and u ...
... eroded only gradually. This excess capacity resulted in subdued pressures on the price of productive resources, dampening non-tradables inflation. These subdued pressures have been particularly evident in the labour market, with subdued labour demand resulting in belowaverage employment growth and u ...
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.