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CHAPTER 21: Open-Economy Macroeconomics: The Balance of
... b. Exchange rates strongly influence interest rates. c. Exchange rates are a factor in determining the flow of international trade. d. All of the above. ...
... b. Exchange rates strongly influence interest rates. c. Exchange rates are a factor in determining the flow of international trade. d. All of the above. ...
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... economy. In Greece government employees built homes with their credit-financed income and in Spain the construction workers paid taxes out of their credit financed wages to the state. In addition, the Spanish state collected a property tax, whose revenue increased enormously during the real estate b ...
... economy. In Greece government employees built homes with their credit-financed income and in Spain the construction workers paid taxes out of their credit financed wages to the state. In addition, the Spanish state collected a property tax, whose revenue increased enormously during the real estate b ...
Week 2 Practice Quiz b Answers
... 1 percentage point per year (even with the innovations they have made in measurement during the last 15 years). Take as given that the CPI inflation rate overstates the true inflation rate by 1 percentage point per year. Assuming that the 2003 CPI level is measured correctly, what should be the “tru ...
... 1 percentage point per year (even with the innovations they have made in measurement during the last 15 years). Take as given that the CPI inflation rate overstates the true inflation rate by 1 percentage point per year. Assuming that the 2003 CPI level is measured correctly, what should be the “tru ...
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... In real terms however, the recent price increase is only a cyclical recovery and has yet to reach the peaks of 1979-80. Moreover, non-oil commodity prices such as metal and minerals (e.g. gold and copper) have also risen significantly and have contributed very positively to the balance-of-payment po ...
... In real terms however, the recent price increase is only a cyclical recovery and has yet to reach the peaks of 1979-80. Moreover, non-oil commodity prices such as metal and minerals (e.g. gold and copper) have also risen significantly and have contributed very positively to the balance-of-payment po ...
‘The Empirical Implications of the Interest-Rate Lower Bound’ Gust, Lopez-Salido and Smith Discussion
... According to CE, evidence that quality of linear approximations is poor rests on examples where output deviates by more than 20 percent from its steady state. For perturbations of reasonable size, conclusions arrived at in ZLB analysis using linear approximations appear to be robust. But those appro ...
... According to CE, evidence that quality of linear approximations is poor rests on examples where output deviates by more than 20 percent from its steady state. For perturbations of reasonable size, conclusions arrived at in ZLB analysis using linear approximations appear to be robust. But those appro ...
Asset Price Volatility and Monetary Policy
... press and the business community, as well as some professional economists, have repeatedly chastised the Federal Reserve for not raising interest rates sufficiently in the past to prick what they are sure has been a highly charged asset bubble In several recent papers with Ben Bernanke I have addres ...
... press and the business community, as well as some professional economists, have repeatedly chastised the Federal Reserve for not raising interest rates sufficiently in the past to prick what they are sure has been a highly charged asset bubble In several recent papers with Ben Bernanke I have addres ...
Money and Contracts
... that I present is important to my theoretical arguments because I shall suggest that monetary policy operates by increasing the spread between these two rates. It is well known that contractionary open market operations by the central bank can lead to an increase in the rate of interest on treasury ...
... that I present is important to my theoretical arguments because I shall suggest that monetary policy operates by increasing the spread between these two rates. It is well known that contractionary open market operations by the central bank can lead to an increase in the rate of interest on treasury ...
I. INTERNATIONAL DEVELOPMENTS
... transactions that banks conduct on their own behalves and accounts under a distinct legal entity and separation of these transactions from deposit banking activities. In this way, the “universal banking” model that gathers the prevailing investment and deposit banking activities in Europe under one ...
... transactions that banks conduct on their own behalves and accounts under a distinct legal entity and separation of these transactions from deposit banking activities. In this way, the “universal banking” model that gathers the prevailing investment and deposit banking activities in Europe under one ...
NBER WORKING PAPER SERIES THE EURO AND EUROPEAN ECONOMIC CONDITIONS
... The creation of the euro should now be recognized as an experiment that has led to the sovereign debt crisis in several countries, the fragile condition of major European banks, the high levels of unemployment, and the large trade deficits that now exist in most Eurozone countries. Although the Euro ...
... The creation of the euro should now be recognized as an experiment that has led to the sovereign debt crisis in several countries, the fragile condition of major European banks, the high levels of unemployment, and the large trade deficits that now exist in most Eurozone countries. Although the Euro ...
Monetary expansion raises AD in the SR
... Business investment & other components of spending A depend not just on the nominal interest rate i, but on the real interest rate r ≡ i - e . (To compute corporate cost of capital, it should also be long-term i, and adjusted for taxes.) ...
... Business investment & other components of spending A depend not just on the nominal interest rate i, but on the real interest rate r ≡ i - e . (To compute corporate cost of capital, it should also be long-term i, and adjusted for taxes.) ...
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... Output is currently below the natural level of output. The interest rate will rise as the economy adjusts to this situation. The AS curve will tend to shift down over time. The nominal wage will tend to decrease as individuals revise their expectations of the price level. e. None of the above. 24. F ...
... Output is currently below the natural level of output. The interest rate will rise as the economy adjusts to this situation. The AS curve will tend to shift down over time. The nominal wage will tend to decrease as individuals revise their expectations of the price level. e. None of the above. 24. F ...
algierslessprocyclical
... during temporary downturns, to sustain consumption and investment, and should repay or accumulate net foreign assets during temporary upturns. In practice, it does not always work this way. Capital flows are more often procyclical than countercyclical.2 Most theories to explain this involve imperfec ...
... during temporary downturns, to sustain consumption and investment, and should repay or accumulate net foreign assets during temporary upturns. In practice, it does not always work this way. Capital flows are more often procyclical than countercyclical.2 Most theories to explain this involve imperfec ...
International Economics, 10e (Krugman/Obstfeld/Melitz) Chapter 19
... C) foreign investment in one firm may have beneficial technological spillover effects on other foreign producers that the investing firm does not capture. D) an addition to the home capital stock may reduce domestic unemployment and therefore lead to higher national income. E) domestic savings incre ...
... C) foreign investment in one firm may have beneficial technological spillover effects on other foreign producers that the investing firm does not capture. D) an addition to the home capital stock may reduce domestic unemployment and therefore lead to higher national income. E) domestic savings incre ...
Exam 3 Key
... If capital per effective worker were kept steady, which would require gross investment equal to 13% of the capital stock each year, output per worker, Y/N, would increase at the rate of technological progress or 2%. If only capital per worker is kept steady, Y/N will increase at successively lower r ...
... If capital per effective worker were kept steady, which would require gross investment equal to 13% of the capital stock each year, output per worker, Y/N, would increase at the rate of technological progress or 2%. If only capital per worker is kept steady, Y/N will increase at successively lower r ...
Speech to the Hong Kong Association of Northern California
... employees as they move to ramp down production. These production cuts will likely slow overall real GDP growth in the U.S. until the adjustment to a lower level is reached, most likely next year. Another factor restraining growth is the rise in interest rates over the past couple of years as the Fe ...
... employees as they move to ramp down production. These production cuts will likely slow overall real GDP growth in the U.S. until the adjustment to a lower level is reached, most likely next year. Another factor restraining growth is the rise in interest rates over the past couple of years as the Fe ...
Effects of the Exchange Rate on Output and Price Level:Evidence
... countries and concluded that in the long-run devaluations were contrationary in non-OECD countries. In addition to cross-section econometric studies, a number of econometric studies have also used time series data to investigate the contractionary devaluation hypothesis. Bahmani-Oskooee and Rhee (19 ...
... countries and concluded that in the long-run devaluations were contrationary in non-OECD countries. In addition to cross-section econometric studies, a number of econometric studies have also used time series data to investigate the contractionary devaluation hypothesis. Bahmani-Oskooee and Rhee (19 ...
Energy Economics – II Jeffrey Frankel Harpel Professor
... Gavin, Hausmann, Perotti & Talvi (1996); Kaminsky, Reinhart & Vegh (2005); Reinhart & Reinhart (2009); and Mendoza & Terrones (2008). ...
... Gavin, Hausmann, Perotti & Talvi (1996); Kaminsky, Reinhart & Vegh (2005); Reinhart & Reinhart (2009); and Mendoza & Terrones (2008). ...
Slides session 11 - Prof. Dr. Dennis Alexis Valin Dittrich
... Which will have the effect of amplifying a negative real shock and which are intended to offset a shock? a Several large financial institutions become insolvent as a housing bubble bursts & subprime mortgages begin to default in large numbers. b Many financial institutions begin issuing fewer loans ...
... Which will have the effect of amplifying a negative real shock and which are intended to offset a shock? a Several large financial institutions become insolvent as a housing bubble bursts & subprime mortgages begin to default in large numbers. b Many financial institutions begin issuing fewer loans ...
IS CHILE A MODEL FOR DEVELOPMENTrev
... These balances of the real economy were considered by the new authorities as crucial for development (meant as GDP growth with reduced inequality). One outstanding feature of this period was the regulation of the capital account, with a flexible reserve requirement (encaje), quite active in these ye ...
... These balances of the real economy were considered by the new authorities as crucial for development (meant as GDP growth with reduced inequality). One outstanding feature of this period was the regulation of the capital account, with a flexible reserve requirement (encaje), quite active in these ye ...
Capital account liberalisation: the Japanese experience
... did not expand because of the strong expectations that the yen would strengthen in the future (Graph 3). In May 1971, the German mark began to float, and this gave rise to expectations that the yen would also be revalued. As a result, huge capital flows into Japan occurred, and official exchange re ...
... did not expand because of the strong expectations that the yen would strengthen in the future (Graph 3). In May 1971, the German mark began to float, and this gave rise to expectations that the yen would also be revalued. As a result, huge capital flows into Japan occurred, and official exchange re ...
Trade, exchange rates and income distribution
... A more pragmatic view of international competition allows for the impact of structural differences but asserts that each country or country group must look after its own interests and find its own way to achieve economic development while respecting international rules. The problem that has to be fa ...
... A more pragmatic view of international competition allows for the impact of structural differences but asserts that each country or country group must look after its own interests and find its own way to achieve economic development while respecting international rules. The problem that has to be fa ...
final review macro - Open Computing Facility
... Closed-economy Version 14. Assume closed economies which mean no exports and no imports. This means that NX=0. 15. Planned Aggregate Expenditures = PAE = C+I+G+NX [remember that this is always true because this is a definition] 16. Remember that “I” stands for planned investment spending. 17. Y=PAE ...
... Closed-economy Version 14. Assume closed economies which mean no exports and no imports. This means that NX=0. 15. Planned Aggregate Expenditures = PAE = C+I+G+NX [remember that this is always true because this is a definition] 16. Remember that “I” stands for planned investment spending. 17. Y=PAE ...
macroeconomics class review
... stimulate consumption, we will solve the problem. Keynes invented a concept called the marginal propensity to consume (MPC). The MPC indicates how much of any additional earnings people consume. For example, if the government gives me $1000 which I previously did not own, and if I decide to spend $8 ...
... stimulate consumption, we will solve the problem. Keynes invented a concept called the marginal propensity to consume (MPC). The MPC indicates how much of any additional earnings people consume. For example, if the government gives me $1000 which I previously did not own, and if I decide to spend $8 ...