Financial instruments
... An RCB is a standard short-dated debt security which offers a relatively high coupon. Such coupon should be considered as remunerating the option reserved by the issuer (usually a bank) of redeeming RCBs upon maturity, whether in cash at the nominal value of the securities in question, in shares, or ...
... An RCB is a standard short-dated debt security which offers a relatively high coupon. Such coupon should be considered as remunerating the option reserved by the issuer (usually a bank) of redeeming RCBs upon maturity, whether in cash at the nominal value of the securities in question, in shares, or ...
Price-Level Targeting and Relative-Price Shocks
... firms’ desired markup of price over marginal cost. The New Keynesian model is based on two crucial assumptions: (i) firms change prices only periodically, meaning that prices generally remain fixed for more than one period, and (ii) firms form their expectations about the future in a rational way. Since ...
... firms’ desired markup of price over marginal cost. The New Keynesian model is based on two crucial assumptions: (i) firms change prices only periodically, meaning that prices generally remain fixed for more than one period, and (ii) firms form their expectations about the future in a rational way. Since ...
Defying Gravity: Can Japanese sovereign debt continue to increase
... the debt eventually will exceed the amount of private sector financial assets. 2 When the market believes that the point when the debt exceeds the domestic private sector financial assets is close, the yield will have to rise. The current Japanese debt-to-GDP ratio is higher than southern European ...
... the debt eventually will exceed the amount of private sector financial assets. 2 When the market believes that the point when the debt exceeds the domestic private sector financial assets is close, the yield will have to rise. The current Japanese debt-to-GDP ratio is higher than southern European ...
The Nexus of Consumer Credit, Household Debt Service and
... ten years ago, but the ratio remained smaller than that in other industrialised economies (Table 1 and Chart 1). The rise was mainly accounted for by the rapid increase in residential mortgages in the period before the Asian financial crisis, alongside increased home ownership and higher property pr ...
... ten years ago, but the ratio remained smaller than that in other industrialised economies (Table 1 and Chart 1). The rise was mainly accounted for by the rapid increase in residential mortgages in the period before the Asian financial crisis, alongside increased home ownership and higher property pr ...
PDF
... Export oriented economies are opened to foreign competition which may lead to closure of local industries once they cannot withstand the competition. Exports has to do with production of goods and services in one country and selling it to earn foreign exchange which can be used to purchase goods and ...
... Export oriented economies are opened to foreign competition which may lead to closure of local industries once they cannot withstand the competition. Exports has to do with production of goods and services in one country and selling it to earn foreign exchange which can be used to purchase goods and ...
Fiscal Policy in a Currency Union at the Zero Lower Bound ∗
... the optimal rules are dynamic in nature, even when no fiscal commitment is available. However, we do find a simple rule that directs fiscal demand toward regions with severe output gaps will closely match optimal reallocative policy. A number of papers in the New Keynesian tradition have examined fi ...
... the optimal rules are dynamic in nature, even when no fiscal commitment is available. However, we do find a simple rule that directs fiscal demand toward regions with severe output gaps will closely match optimal reallocative policy. A number of papers in the New Keynesian tradition have examined fi ...
6 Aggregate Supply: Wages, Prices, and Unemployment
... Firms negotiate wage agreements with those who have jobs (insiders), not with those who lack jobs (outsiders). Insiders like high wages, and do not care whether these wages leave others unemployed. Because it is costly for firms to hire and train new workers, these insiders are able to drive real wa ...
... Firms negotiate wage agreements with those who have jobs (insiders), not with those who lack jobs (outsiders). Insiders like high wages, and do not care whether these wages leave others unemployed. Because it is costly for firms to hire and train new workers, these insiders are able to drive real wa ...
MONETARY POLICY REPORT
... annual GDP reduction will continue. However, the development and strengthening of positive trends in the economic activity will take some time. The situation in industry is marked by instability and uneven trends among sectors and regions. Later on the output growth will also be restrained by slacki ...
... annual GDP reduction will continue. However, the development and strengthening of positive trends in the economic activity will take some time. The situation in industry is marked by instability and uneven trends among sectors and regions. Later on the output growth will also be restrained by slacki ...
Predictable changes in yields and forward rates
... We report estimates of Eq. (4) in Table 1 and Fig. 1 for all four sets of forward rate data. (Fig. 1 is based on a larger set of maturities than Table 1, but is otherwise identical.) It should be no surprise that the data di!er substantially from the expectations hypothesis. With the exception of th ...
... We report estimates of Eq. (4) in Table 1 and Fig. 1 for all four sets of forward rate data. (Fig. 1 is based on a larger set of maturities than Table 1, but is otherwise identical.) It should be no surprise that the data di!er substantially from the expectations hypothesis. With the exception of th ...
Charles I. Plosser Robert G. King Working Paper No. 853 1050
... the financial industry--flows of services generated from factors of production--in a manner that could describe any intermediate product. The transaction (banking) industry, however, usually provides these services in conjunction with portfolio management or intermediary services. That is, the indus ...
... the financial industry--flows of services generated from factors of production--in a manner that could describe any intermediate product. The transaction (banking) industry, however, usually provides these services in conjunction with portfolio management or intermediary services. That is, the indus ...
Did Greenspan Deserve Support for Another Term?
... prospect of a catastrophic, Japanese-style deflationary depression in the United States if the Fed did not promptly and drastically cut interest rates. The authors of the first wave of these articles were mainly financial columnists and think-tank economists associated with the supply-side school, a ...
... prospect of a catastrophic, Japanese-style deflationary depression in the United States if the Fed did not promptly and drastically cut interest rates. The authors of the first wave of these articles were mainly financial columnists and think-tank economists associated with the supply-side school, a ...
Monetary Policy and Business Investment in the Euro
... The ECB has cut its headline policy rate (the rate applied to its main refinancing operations) from 4.25 percent in October 2008 to zero in recent months. However, as anyone who has approached a bank for a loan will know, businesses and households are not able to borrow at zero rates and the transmi ...
... The ECB has cut its headline policy rate (the rate applied to its main refinancing operations) from 4.25 percent in October 2008 to zero in recent months. However, as anyone who has approached a bank for a loan will know, businesses and households are not able to borrow at zero rates and the transmi ...
Integration of Real and Monetary Sectors with Labor Market – SD
... Demand for money (nominal) thus interpreted has a unit of dollar/year, while money supply as a stock of cash has a unit of dollar. Therefore, if the equation (3) is justified in SD model, demand for money has to be divided by a velocity of money, which has a unit of 1/year as illustrated in Figure 3 ...
... Demand for money (nominal) thus interpreted has a unit of dollar/year, while money supply as a stock of cash has a unit of dollar. Therefore, if the equation (3) is justified in SD model, demand for money has to be divided by a velocity of money, which has a unit of 1/year as illustrated in Figure 3 ...
Minutes of the Federal Open Market Committee June 18–19, 2013
... and Federal Reserve communications. Information about the U.S. economy was somewhat better, on balance, than investors had anticipated, apparently giving them greater confidence in the economic outlook. Federal Reserve communications over the period reportedly were interpreted by market participants ...
... and Federal Reserve communications. Information about the U.S. economy was somewhat better, on balance, than investors had anticipated, apparently giving them greater confidence in the economic outlook. Federal Reserve communications over the period reportedly were interpreted by market participants ...
Macro2
... country with GDP in another country is problematic because prices of particular products in one country may be much less or much more than in the other country. – For example, using the market exchange rate to value Chinese GDP in dollars leads to an estimate that in 2006, U.S. real GDP per person w ...
... country with GDP in another country is problematic because prices of particular products in one country may be much less or much more than in the other country. – For example, using the market exchange rate to value Chinese GDP in dollars leads to an estimate that in 2006, U.S. real GDP per person w ...
Book-introduction to derivatives
... increase further in case SBP allows $/PKR option not available as yet. Currently transactions on FX options are allowed against G7 currencies only. IRS has also shown substantial growth on the basis of rising interest rate scenario. Telecom, Textile and cement were the main contributors for the cont ...
... increase further in case SBP allows $/PKR option not available as yet. Currently transactions on FX options are allowed against G7 currencies only. IRS has also shown substantial growth on the basis of rising interest rate scenario. Telecom, Textile and cement were the main contributors for the cont ...
AGGREGATE DEMAND AND EXPENDITURE
... percent of this type of spending. Second, services include housing services measured directly by rents being paid from tenant to landlord, in the case of rental housing, or indirectly as imputed rent that an individual would pay to himself in the case of owner occupied housing. In the latter case th ...
... percent of this type of spending. Second, services include housing services measured directly by rents being paid from tenant to landlord, in the case of rental housing, or indirectly as imputed rent that an individual would pay to himself in the case of owner occupied housing. In the latter case th ...
FINANCIAL DERIVATIVES FOR BEGINNERS
... role. The market embodies a spot market with a forward market. The forward market represents the selling and buying committed or due on some future dates. To understand the dynamics of foreign exchange market in Pakistan or in any country we have to understand the difference and relationship between ...
... role. The market embodies a spot market with a forward market. The forward market represents the selling and buying committed or due on some future dates. To understand the dynamics of foreign exchange market in Pakistan or in any country we have to understand the difference and relationship between ...
Economic Fluctuations, Unemployment, and Inflation (15th ed.)
... widely among countries. •For Canada, Germany, Switzerland, and the U.S. the annual inflation rates for the 2006-12 period were below 4% -and- variations (year to year) were no more than 1 or 2%. •In contrast, both the annual inflation rate and the change between years was much greater for Bolivia, I ...
... widely among countries. •For Canada, Germany, Switzerland, and the U.S. the annual inflation rates for the 2006-12 period were below 4% -and- variations (year to year) were no more than 1 or 2%. •In contrast, both the annual inflation rate and the change between years was much greater for Bolivia, I ...
Principles of Macroeconomics Econ 202
... – http://www.homefair.com/homefair/calc/salcalc.html – http://www.bestplaces.net/html/cost_of_living.html ...
... – http://www.homefair.com/homefair/calc/salcalc.html – http://www.bestplaces.net/html/cost_of_living.html ...
A Dynamic Aggregate Supply and Aggregate Demand Model with
... combination between any of the shocks is possible, but for the sake of presentation we simulate each separately and report the results. The baseline set for parameter values presented here is the same across all simulations and is equal to the default (first) set-up presented in section 3. First, we ...
... combination between any of the shocks is possible, but for the sake of presentation we simulate each separately and report the results. The baseline set for parameter values presented here is the same across all simulations and is equal to the default (first) set-up presented in section 3. First, we ...
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.