Chapter 16 Output and the Exchange Rate in the Short Run
... If the representative basket of European goods and services costs 40 euros, the representative U.S. basket costs $50, and the dollar/euro exchange rate is $0.90 per euro, then the price of the European basket in terms of U.S. basket is ...
... If the representative basket of European goods and services costs 40 euros, the representative U.S. basket costs $50, and the dollar/euro exchange rate is $0.90 per euro, then the price of the European basket in terms of U.S. basket is ...
Does Population Growth Affect Housing Bubbles?
... The U.S. experienced an exceptional increase in asset prices prior to the crisis, especially house prices augmented considerably, compared to other economic growth periods. Consumption and employment were high and the economy boomed. The country was in the middle of an upward turning spiral. However ...
... The U.S. experienced an exceptional increase in asset prices prior to the crisis, especially house prices augmented considerably, compared to other economic growth periods. Consumption and employment were high and the economy boomed. The country was in the middle of an upward turning spiral. However ...
Reflating Japan: Time to Get Unconventional?
... Since the bubble burst in the early 1990s, Japan has experienced deficient nominal and real GDP growth and repeated deflationary episodes. Monetary policy has been unable to get the economy out of the liquidity trap, given the Effective Lower Bound (ELB) on monetary policy rates. These factors toget ...
... Since the bubble burst in the early 1990s, Japan has experienced deficient nominal and real GDP growth and repeated deflationary episodes. Monetary policy has been unable to get the economy out of the liquidity trap, given the Effective Lower Bound (ELB) on monetary policy rates. These factors toget ...
F
... that a large rate of deflation is optimal.S What theoretical research has done is to identify the considerations important for determining the optimal inflation rate. Society’s preferred long-run inflation target will depend on the importance it attaches to these considerations. The researcher canno ...
... that a large rate of deflation is optimal.S What theoretical research has done is to identify the considerations important for determining the optimal inflation rate. Society’s preferred long-run inflation target will depend on the importance it attaches to these considerations. The researcher canno ...
NBER WORKING PAPER SERIES THE ROLES OF MONETARY, FINANCIAL AND
... increase in lump-sum taxes, L, will reduce real income unless, 'given the government's real spending program, money- and bond-financed deficits are exactly equivalent to explicit lump-sum taxation. case, ...
... increase in lump-sum taxes, L, will reduce real income unless, 'given the government's real spending program, money- and bond-financed deficits are exactly equivalent to explicit lump-sum taxation. case, ...
29 INFLATION, JOBS, AND THE BUSINESS CYCLE**
... According to RBC theory, how does a fall in productivity growth influence investment demand, the market for loanable funds, the real interest rate, the demand for labor, the supply of labor, employment, and the real wage rate? According to real business cycle theory, a fall in productivity growth de ...
... According to RBC theory, how does a fall in productivity growth influence investment demand, the market for loanable funds, the real interest rate, the demand for labor, the supply of labor, employment, and the real wage rate? According to real business cycle theory, a fall in productivity growth de ...
portable document (.pdf) format
... The goal of this paper was to examine the interrelationships among certain economic indicators in Nigeria by using the concept of Granger causality tests developed by Granger(1969). We used sixteen VAR models to test for Pairwise Granger (non) causality among the economic indicators and the followin ...
... The goal of this paper was to examine the interrelationships among certain economic indicators in Nigeria by using the concept of Granger causality tests developed by Granger(1969). We used sixteen VAR models to test for Pairwise Granger (non) causality among the economic indicators and the followin ...
risk management: an introduction to financial engineering
... elsewhere, but home owners held onto their low-interest-rate mortgages. S&Ls were forced into borrowing over the short term at very high rates. They began taking greater lending ...
... elsewhere, but home owners held onto their low-interest-rate mortgages. S&Ls were forced into borrowing over the short term at very high rates. They began taking greater lending ...
Money and Information in a New Neoclassical Synthesis Framework
... money plays no role, typically resulting to a dismissal of any reference to monetary aggregates. There exist aspects of monetary policy design in practice, however, that do not reconcile easily with the above description. As Bernanke (2006) observes “..... the Federal Reserve will continue to monito ...
... money plays no role, typically resulting to a dismissal of any reference to monetary aggregates. There exist aspects of monetary policy design in practice, however, that do not reconcile easily with the above description. As Bernanke (2006) observes “..... the Federal Reserve will continue to monito ...
This PDF is a selection from an out-of-print volume from... of Economic Research
... recognize an asymmetry: there is no upper limit to firms’ price increases in response to excess demand, but in reverse the argument does not apply. Stopping an inflation of, say, 400 percent by using slack is very difficult. Even as restrictive policy reduces nominal spending, firms are forced to ma ...
... recognize an asymmetry: there is no upper limit to firms’ price increases in response to excess demand, but in reverse the argument does not apply. Stopping an inflation of, say, 400 percent by using slack is very difficult. Even as restrictive policy reduces nominal spending, firms are forced to ma ...
Comments on Paul Davidson`s “Full Employment, Open Economy
... The essential idea goes something like this. Consider first a small open economy at full employment with a current account deficit. To improve the trade balance, whilst remaining at full employment, the country needs to both depreciate its real exchange rate (an “expenditure switching” policy) and r ...
... The essential idea goes something like this. Consider first a small open economy at full employment with a current account deficit. To improve the trade balance, whilst remaining at full employment, the country needs to both depreciate its real exchange rate (an “expenditure switching” policy) and r ...
Open-Market Operations in a Model of Regulated
... The intermediaries of the earlier paper are like bond mutual funds. A once-for-all, open-market purchase-a central bank purchase of outstanding government bonds-decreases the amount of bonds and the liabilities of these bond funds and increases the amount of currency held by the public. Under the as ...
... The intermediaries of the earlier paper are like bond mutual funds. A once-for-all, open-market purchase-a central bank purchase of outstanding government bonds-decreases the amount of bonds and the liabilities of these bond funds and increases the amount of currency held by the public. Under the as ...
Asset Returns and Economic Growth
... is to prefund them, and for that reason projections of future rates of return on capital play an important role in today’s economic policy debates. The solutions to many policy issues depend heavily on whether historical real rates of return—especially the 6.5 percent or so annual average realized r ...
... is to prefund them, and for that reason projections of future rates of return on capital play an important role in today’s economic policy debates. The solutions to many policy issues depend heavily on whether historical real rates of return—especially the 6.5 percent or so annual average realized r ...
Monetary Misperceptions: Optimal Monetary Policy
... is, if an invention is made today, it is not forgotten immediately tomorrow or slowly forgotten over time – then optimal policy approaches nominal income (NGDP) targeting as information approaches completeness. Nominal income targeting is also exactly optimal if agents have log preferences over cons ...
... is, if an invention is made today, it is not forgotten immediately tomorrow or slowly forgotten over time – then optimal policy approaches nominal income (NGDP) targeting as information approaches completeness. Nominal income targeting is also exactly optimal if agents have log preferences over cons ...
Economics for Today 2nd edition Irvin B. Tucker
... determined the level of investment? • According to Keynes, what determines the level of investment? • What is the investment demand curve? • Why is investment demand unstable? • What is autonomous expenditure? • What is the aggregate expenditure function? ...
... determined the level of investment? • According to Keynes, what determines the level of investment? • What is the investment demand curve? • Why is investment demand unstable? • What is autonomous expenditure? • What is the aggregate expenditure function? ...
The effects of exchange rate fluctuations on economic activity in
... depreciation of the exchange rate. The data under investigation are for Turkey over the sample period 1980–2004. The real effective exchange rate is constructed as a weighted average of the log value of the real price of the Turkish lira in terms of the currencies of its major trading partners. The ...
... depreciation of the exchange rate. The data under investigation are for Turkey over the sample period 1980–2004. The real effective exchange rate is constructed as a weighted average of the log value of the real price of the Turkish lira in terms of the currencies of its major trading partners. The ...
RELATIONSHIP BETWEEN MACROECONOMIC VARIABLES AND
... perform better since they are negatively correlated with financial performance of these companies. The study also recommends that there is also need for the Government to control the broad money supply in Kenya as there is some evidence to suggest that higher money supply may lead to better performa ...
... perform better since they are negatively correlated with financial performance of these companies. The study also recommends that there is also need for the Government to control the broad money supply in Kenya as there is some evidence to suggest that higher money supply may lead to better performa ...
A Dynamic Model of Aggregate Demand and Aggregate Supply
... When forecasting in period t what inflation rate will prevail in period t + 1, people simply look at inflation in period t and extrapolate it forward. The same assumption applies in every period. Thus, when inflation was observed in period t − 1, people expected that rate to continue. This implies t ...
... When forecasting in period t what inflation rate will prevail in period t + 1, people simply look at inflation in period t and extrapolate it forward. The same assumption applies in every period. Thus, when inflation was observed in period t − 1, people expected that rate to continue. This implies 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.