Advanced Macroeconomics 4. The Zero Lower Bound
... In recent years, the US economy has been in a position that resembles Japan during its long liquidity trap period: The economy has been weak the Fed has kept its policy rate close to zero. Ben Bernanke, as Chairman of the Fed, was not keen to implement the ideas he recommended as an academic. At his ...
... In recent years, the US economy has been in a position that resembles Japan during its long liquidity trap period: The economy has been weak the Fed has kept its policy rate close to zero. Ben Bernanke, as Chairman of the Fed, was not keen to implement the ideas he recommended as an academic. At his ...
Review Module 18 Slides
... in commodity prices, nominal wages, or productivity lead to changes in producers’ profits and shift the short-run aggregate supply curve. ...
... in commodity prices, nominal wages, or productivity lead to changes in producers’ profits and shift the short-run aggregate supply curve. ...
Monetary Policy Fall 2016 (material for last course outline)
... Another way to look at this process is to recognize that reserves pay very little interest (they paid no interest at all prior to 2007). If the banks agree to sell interestbearing government bonds to the Fed, they must intend to loan the reserves out. (They don’t want to just sit on the barren reser ...
... Another way to look at this process is to recognize that reserves pay very little interest (they paid no interest at all prior to 2007). If the banks agree to sell interestbearing government bonds to the Fed, they must intend to loan the reserves out. (They don’t want to just sit on the barren reser ...
File
... matter when it comes to understanding the behavior of inflation and unemployment? • When unemployment is low, firms compete for workers and bid up wages sharply. • When unemployment is high, it is more difficult for firms to cut wages because workers tend to resist wage cuts. Result: Even if the tot ...
... matter when it comes to understanding the behavior of inflation and unemployment? • When unemployment is low, firms compete for workers and bid up wages sharply. • When unemployment is high, it is more difficult for firms to cut wages because workers tend to resist wage cuts. Result: Even if the tot ...
IS-LM and Monetarism
... A second issue is that the quantity theorist regards the supply of money as affected by factors other than those affecting the demand for money. A third issue is that Keynes asserts that under conditions of underemployment, when interest rates are positive but low, a liquidity trap exists such that ...
... A second issue is that the quantity theorist regards the supply of money as affected by factors other than those affecting the demand for money. A third issue is that Keynes asserts that under conditions of underemployment, when interest rates are positive but low, a liquidity trap exists such that ...
A model of secular stagnation
... natural rate of interest of arbitrary persistence that can, therefore, explain long-lasting slumps. This is particularly relevant when considering the Great Depression in the US (where the short term interest rate started to drop in 1929 only to finally start rising again in 1947) or current day Jap ...
... natural rate of interest of arbitrary persistence that can, therefore, explain long-lasting slumps. This is particularly relevant when considering the Great Depression in the US (where the short term interest rate started to drop in 1929 only to finally start rising again in 1947) or current day Jap ...
Inflation
... • In the U.S., as long as the inflation rate from year to year stays at around 3% per year, Americans are satisfied that the goal of low inflation has been accomplished. • If the inflation rate is above 3%, people expect the government to take action to “fight” inflation. ...
... • In the U.S., as long as the inflation rate from year to year stays at around 3% per year, Americans are satisfied that the goal of low inflation has been accomplished. • If the inflation rate is above 3%, people expect the government to take action to “fight” inflation. ...
Chapter 14: Dynamic AD-AS
... The parameters of the monetary policy rule influence the slope of the DAS curve, so they determine whether a supply shock has a greater effect on output or inflation. Thus, the central bank faces a tradeoff between output variability and inflation variability. ...
... The parameters of the monetary policy rule influence the slope of the DAS curve, so they determine whether a supply shock has a greater effect on output or inflation. Thus, the central bank faces a tradeoff between output variability and inflation variability. ...
Economics of Money, Banking, and Financial Markets, 8e
... 3) According to aggregate demand and supply analysis of inflation and with everything else held constant, a continually increasing money supply causes A) aggregate demand to increase along a stationary aggregate supply curve, leading to continually increasing aggregate output and prices. B) aggregat ...
... 3) According to aggregate demand and supply analysis of inflation and with everything else held constant, a continually increasing money supply causes A) aggregate demand to increase along a stationary aggregate supply curve, leading to continually increasing aggregate output and prices. B) aggregat ...
Intertemporal discoordination in the 100 percent reserve banking
... The recent economic crisis brought to light major weaknesses in our present financial system. The evident vulnerability of the economy to financial disruptions has focused the attention of policy makers and academics on the serious deficiencies of financial arrangements. Whereas nearly all observers ...
... The recent economic crisis brought to light major weaknesses in our present financial system. The evident vulnerability of the economy to financial disruptions has focused the attention of policy makers and academics on the serious deficiencies of financial arrangements. Whereas nearly all observers ...
9 Keynes and money
... to all economic decision makers with perfect certainty or at least that all future events can be reliably statistically predicted based on calculating probability distributions drawn from existing market data. These calculated probability distributions are assumed to govern all past, present and fut ...
... to all economic decision makers with perfect certainty or at least that all future events can be reliably statistically predicted based on calculating probability distributions drawn from existing market data. These calculated probability distributions are assumed to govern all past, present and fut ...
aggregate supply (AS) curve
... FIGURE 28.6 A Shift of the Aggregate Demand Curve When the Economy Is Operating at or Near Maximum Capacity If a shift of aggregate demand occurs while the economy is operating near full capacity, the result will be an increase in the price level with little increase in output from point B to poin ...
... FIGURE 28.6 A Shift of the Aggregate Demand Curve When the Economy Is Operating at or Near Maximum Capacity If a shift of aggregate demand occurs while the economy is operating near full capacity, the result will be an increase in the price level with little increase in output from point B to poin ...
Estimation of Money Demand Function for Selected
... quantity of real money demand are being investigated. The methodology will be based on panel data regression analysis with fixed effect. The sample period of study will be between 1985-2010 years. The quantity theory of money states that, the long term income elasticity needs to be close to the valu ...
... quantity of real money demand are being investigated. The methodology will be based on panel data regression analysis with fixed effect. The sample period of study will be between 1985-2010 years. The quantity theory of money states that, the long term income elasticity needs to be close to the valu ...
More details
... loosen fiscal policy, especially in emerging economies lead to an significant increase of monetary supply. Also reported in The Economist, the monetary supply in emerging economies has an average of high increase by 20% compared to same period of last year and was triplicated the developed countries ...
... loosen fiscal policy, especially in emerging economies lead to an significant increase of monetary supply. Also reported in The Economist, the monetary supply in emerging economies has an average of high increase by 20% compared to same period of last year and was triplicated the developed countries ...
NBER WORKING PAPER SERIES ON THE OR IRRELEVANCE OF PUBLIC
... reemphasizes the result noted by others (see, e.g., Taylor (1980), Neary— Stiglitz (1982)) that the conclusion of the rational expectations models concerning the inefficacy of government policy does not depend so much on the expectational assumptions as on other features of the model; in particular, ...
... reemphasizes the result noted by others (see, e.g., Taylor (1980), Neary— Stiglitz (1982)) that the conclusion of the rational expectations models concerning the inefficacy of government policy does not depend so much on the expectational assumptions as on other features of the model; in particular, ...
Economics Explorer Series No. 3 - Inflation
... problem arises with the emergence of new retail chains, discount stores and on-line shopping. The so-called new outlet bias refers to an overstatement in the CPI as a result of not including price data from these new outlets, which may offer lower prices. At times, prices of goods and services rise ...
... problem arises with the emergence of new retail chains, discount stores and on-line shopping. The so-called new outlet bias refers to an overstatement in the CPI as a result of not including price data from these new outlets, which may offer lower prices. At times, prices of goods and services rise ...