Harvard Kennedy School
... • is another instrument to affect the level of spending. • It can be defined in terms of the interest rate i, which in turn affects i-sensitive components E.g., Taylor Rule sets i. such as I & consumer durables. • Or it can be defined in terms of money supply M. – In which case an expansion is a rig ...
... • is another instrument to affect the level of spending. • It can be defined in terms of the interest rate i, which in turn affects i-sensitive components E.g., Taylor Rule sets i. such as I & consumer durables. • Or it can be defined in terms of money supply M. – In which case an expansion is a rig ...
Chapter 15: Monetary Policy - the School of Economics and Finance
... the price level to fall; rather, it causes the price level to rise by less than it would have risen without the policy. An expansionary monetary policy is sometimes referred to as a loose policy, or an easy policy. A contractionary monetary policy is sometimes referred to as a tight policy. ...
... the price level to fall; rather, it causes the price level to rise by less than it would have risen without the policy. An expansionary monetary policy is sometimes referred to as a loose policy, or an easy policy. A contractionary monetary policy is sometimes referred to as a tight policy. ...
Some Current Controversies in the Theory of Inflation
... usually trying to catch up with general inflation. Such catch-up price increases should not be interpreted as inflation-generating Similarly, when unions raise wages, they are price increases.. often just trying to catch up with past price increases or protect wages from expected future price increa ...
... usually trying to catch up with general inflation. Such catch-up price increases should not be interpreted as inflation-generating Similarly, when unions raise wages, they are price increases.. often just trying to catch up with past price increases or protect wages from expected future price increa ...
Graduate School of Management
... The mechanics of ending inflation is not such a big deal. Every beginning economics student knows the basic equation for inflation: %Growth in Prices %Growth in the Money Supply - %Growth in Real GDP and everybody knows that Upper Bedrock had gotten in this predicament by allowing the money supply ...
... The mechanics of ending inflation is not such a big deal. Every beginning economics student knows the basic equation for inflation: %Growth in Prices %Growth in the Money Supply - %Growth in Real GDP and everybody knows that Upper Bedrock had gotten in this predicament by allowing the money supply ...
EVALUATING ECONOMIC INTEGRATION IN ASEAN: PERSPECTIVES FROM A CLUSTER ANALYSIS
... exchange rate variability is a corollary of the OCA property on convergence. If real exchange variability is low and currencies are stable with each other, then the cost of exchange rate flexibility is lower. Likewise, monthly market returns are included as a measure of financial integration. Under ...
... exchange rate variability is a corollary of the OCA property on convergence. If real exchange variability is low and currencies are stable with each other, then the cost of exchange rate flexibility is lower. Likewise, monthly market returns are included as a measure of financial integration. Under ...
NBER WORKING PAPER SERIES RULE-OF-THUMB CONSUMERS AND THE Jordi Galí
... has been argued that simple interest rate rules can approximate well the performance of complex optimal rules in a variety of environments,1 those rules have also been shown to contain the seeds of unnecessary instability when improperly designed.2 A sufficiently strong feedback from endogenous target ...
... has been argued that simple interest rate rules can approximate well the performance of complex optimal rules in a variety of environments,1 those rules have also been shown to contain the seeds of unnecessary instability when improperly designed.2 A sufficiently strong feedback from endogenous target ...
Ogbokor. Is Namibia`s inflation import driven
... greater success in meeting the objective of maintaining price stability, there is need to put more emphasis in developing the manufacturing base for Namibia as this would help reduce dependency on imports, and hence protect the country against the changes in prices of the imports. The manufacturing ...
... greater success in meeting the objective of maintaining price stability, there is need to put more emphasis in developing the manufacturing base for Namibia as this would help reduce dependency on imports, and hence protect the country against the changes in prices of the imports. The manufacturing ...
Chapter 16 Money in macroeconomics
... to the essential characteristics of money. By its role as a device for making transactions, money helps an economy to avoid the need for a double coincidence of wants. In order to perform this role, money must be a store of value, i.e., a device that maintains value over time. The reason that people ...
... to the essential characteristics of money. By its role as a device for making transactions, money helps an economy to avoid the need for a double coincidence of wants. In order to perform this role, money must be a store of value, i.e., a device that maintains value over time. The reason that people ...
The Phillips Curve in the 1990s - Digital Commons @ IWU
... over four quarters from 1958 through 1996 (Council of Economic Advisors, 1997).2 He then regressed the change in the core inflation rate in time t minus the core inflation rate in time t-4 against a demographically adjusted unemployment rate. He concluded that a one percentage point rise in unemploy ...
... over four quarters from 1958 through 1996 (Council of Economic Advisors, 1997).2 He then regressed the change in the core inflation rate in time t minus the core inflation rate in time t-4 against a demographically adjusted unemployment rate. He concluded that a one percentage point rise in unemploy ...
Some Monetary Facts - Federal Reserve Bank of Minneapolis
... Other evidence for the long-run relationship between money growth and inflation has come from studies using cross-sectional data. In general, these studies include fewer countries and cover a shorter time period than does our study. For example, using a pooled time series-cross-sectional regression, ...
... Other evidence for the long-run relationship between money growth and inflation has come from studies using cross-sectional data. In general, these studies include fewer countries and cover a shorter time period than does our study. For example, using a pooled time series-cross-sectional regression, ...
Maradona theory of interest rates
... possibility of learning about the true model is introduced. So although policy rules offer important insights they do not provide a practical guide to decision-making, and it is useful to examine more deeply why that is the case. No economist can point to a particular model, and in honesty say “that ...
... possibility of learning about the true model is introduced. So although policy rules offer important insights they do not provide a practical guide to decision-making, and it is useful to examine more deeply why that is the case. No economist can point to a particular model, and in honesty say “that ...
Chapter 1
... The demand for money, however, is more complex in being related (positively) to the level of nominal income and (negatively) to a rate of interest. In Figure 1, we show such a demand curve drawn for each of three levels of income. For each level of income, there is a corresponding rate of interest ( ...
... The demand for money, however, is more complex in being related (positively) to the level of nominal income and (negatively) to a rate of interest. In Figure 1, we show such a demand curve drawn for each of three levels of income. For each level of income, there is a corresponding rate of interest ( ...
Sudsawsd (224).pdf
... As stated, the surge in the use of anti-dumping measures is found to be associated with the success of GATT/WTO in reducing world tariff barriers. Thus, a link between trade policy and anti-dumping usage would be expected. Early attempts to empirically examine the determinants of macroeconomic facto ...
... As stated, the surge in the use of anti-dumping measures is found to be associated with the success of GATT/WTO in reducing world tariff barriers. Thus, a link between trade policy and anti-dumping usage would be expected. Early attempts to empirically examine the determinants of macroeconomic facto ...
Macroeconomics: an Introduction - Penn Economics
... 2. Proprietors’ Income: income of noncorporate business. 3. Rental Income: income that landlords receive from renting, including “imputed” rent less expenses on the house, such as depreciation. 4. Corporate Profits: income of corporations after payments to their workers and creditors. 5. Net interes ...
... 2. Proprietors’ Income: income of noncorporate business. 3. Rental Income: income that landlords receive from renting, including “imputed” rent less expenses on the house, such as depreciation. 4. Corporate Profits: income of corporations after payments to their workers and creditors. 5. Net interes ...
The Effect of Changes in the Federal Funds Rate on Stock Markets
... changes. This argument therefore, seems circular. No specific sector related reasons are provided by Bernanke and Kuttner [2005] to further their explanation of sector sensitivity to interest rate. An earlier paper by Ehrmann and Fratzscher [2004], reaches the same results as Bernanke and Kuttner [2 ...
... changes. This argument therefore, seems circular. No specific sector related reasons are provided by Bernanke and Kuttner [2005] to further their explanation of sector sensitivity to interest rate. An earlier paper by Ehrmann and Fratzscher [2004], reaches the same results as Bernanke and Kuttner [2 ...
The U.S. Economy in the 1990s: A Neoliberal Success Story?
... which rose by 26.9 percent over the period. This accounted for 68.8 percent of the rise in the rate of profit.10 The rise in the profit-wage ratio can itself be accounted for by changes in the four right-side variables in equation 2. Note that, since one of the right-side variables in equation 2 (de ...
... which rose by 26.9 percent over the period. This accounted for 68.8 percent of the rise in the rate of profit.10 The rise in the profit-wage ratio can itself be accounted for by changes in the four right-side variables in equation 2. Note that, since one of the right-side variables in equation 2 (de ...
LCCARL252_en.pdf
... fronts. Despite limited fiscal space due to excessive public debt stocks, various countries managed to introduce counter-cyclicality through some combination of larger public infrastructure investment and higher social spending. This welcomed policy stance was mainly possible due to enhanced officia ...
... fronts. Despite limited fiscal space due to excessive public debt stocks, various countries managed to introduce counter-cyclicality through some combination of larger public infrastructure investment and higher social spending. This welcomed policy stance was mainly possible due to enhanced officia ...
Interest Rates
... typically alter purchases to favor the good that has become cheaper – Income Effect: Changing prices alter one’s purchasing power. When purchasing power falls/rises, purchases fall/rise ...
... typically alter purchases to favor the good that has become cheaper – Income Effect: Changing prices alter one’s purchasing power. When purchasing power falls/rises, purchases fall/rise ...
13 TIME INCONSISTENCY IN MONETARY POLICY
... Since the times of accepting the state in the economic environment, which is linked mainly with the “New Deal” programme, a polemic has been raging over the magnitude and justification of such interventions in an economy. However, a stabilisation policy, which should ensure permanently sustainable g ...
... Since the times of accepting the state in the economic environment, which is linked mainly with the “New Deal” programme, a polemic has been raging over the magnitude and justification of such interventions in an economy. However, a stabilisation policy, which should ensure permanently sustainable g ...
NBER WORKING PAPER SERIES OPTIMAL MONETARY AND FISCAL POLICY Jordi Gali
... In the present paper we propose a tractable framework for policy analysis in a monetary union that meets the three desiderata listed above. First, we introduce nominal rigidities by assuming a staggered price setting structure, analogous to the one embedded in the workhorse model used for monetary p ...
... In the present paper we propose a tractable framework for policy analysis in a monetary union that meets the three desiderata listed above. First, we introduce nominal rigidities by assuming a staggered price setting structure, analogous to the one embedded in the workhorse model used for monetary p ...
Chapter 1: Introduction
... Recall from chapter seven that the demand for nominal money--the quantity of liquid readily-spendable assets that people wish to hold--is proportional to total nominal income P x Y, has a time trend associated with changes in -sector and transactions-processing technology, and is related inversely r ...
... Recall from chapter seven that the demand for nominal money--the quantity of liquid readily-spendable assets that people wish to hold--is proportional to total nominal income P x Y, has a time trend associated with changes in -sector and transactions-processing technology, and is related inversely r ...
ch05
... Short-Run Aggregate Supply • High levels of real GDP are associated with high inflation and a high price level for many reasons – when demand for products is stronger than anticipated, firms raise their prices – when aggregate demand is higher than potential output, some industries may reach the li ...
... Short-Run Aggregate Supply • High levels of real GDP are associated with high inflation and a high price level for many reasons – when demand for products is stronger than anticipated, firms raise their prices – when aggregate demand is higher than potential output, some industries may reach the li ...
The Short-Run Phillips Curve
... between unemployment and inflation that arise as shifts in the aggregate demand curve move the economy along the short-run aggregate supply curve. • The greater the aggregate demand for goods and services, the greater is the economy’s output, and the higher is the overall price level. • A higher lev ...
... between unemployment and inflation that arise as shifts in the aggregate demand curve move the economy along the short-run aggregate supply curve. • The greater the aggregate demand for goods and services, the greater is the economy’s output, and the higher is the overall price level. • A higher lev ...