Study Guide for Williamson Intermediate Macroeconomics, First
... services purchased by consumers and compares a bundle of goods and services one year with the cost of that same bundle in another year. Thus the CPI is a fixed-weight price index and is given by total current expenditures over total expenditures at base year prices and multiplies the result by 100. ...
... services purchased by consumers and compares a bundle of goods and services one year with the cost of that same bundle in another year. Thus the CPI is a fixed-weight price index and is given by total current expenditures over total expenditures at base year prices and multiplies the result by 100. ...
Macroeconomic Measurements, Part I: Prices and Unemployment
... The CPI is used (1) as an economic indicator, (2) to find T H I N K I N G L I K E A N Comparing one thing with something else can the real value of an economic variable, and (3) to adjust be extremely useful. For example, in each of certain income payments. these three cases, we compared the percent ...
... The CPI is used (1) as an economic indicator, (2) to find T H I N K I N G L I K E A N Comparing one thing with something else can the real value of an economic variable, and (3) to adjust be extremely useful. For example, in each of certain income payments. these three cases, we compared the percent ...
Monetary Policy Rules for Managing Aid Surges in Africa
... much of Sub-Saharan Africa. Thus, the private sector engages in currency substitution but neither it nor the public sector has direct access to world capital markets. Hence, domestic government debt, which is the only marketable debt instrument in the economy, is effectively non-tradable so that dom ...
... much of Sub-Saharan Africa. Thus, the private sector engages in currency substitution but neither it nor the public sector has direct access to world capital markets. Hence, domestic government debt, which is the only marketable debt instrument in the economy, is effectively non-tradable so that dom ...
the consumer price index
... a more limited selection. Which would you prefer? Most people would pick the store with greater variety. In essence, the increased set of possible choices makes each dollar more valuable. The same is true with the evolution of the economy over time: As new goods are introduced, consumers have more c ...
... a more limited selection. Which would you prefer? Most people would pick the store with greater variety. In essence, the increased set of possible choices makes each dollar more valuable. The same is true with the evolution of the economy over time: As new goods are introduced, consumers have more c ...
Business Cycles, Unemployment, & Inflation
... 4. The unemployment rate is affected by the business cycle. The unemployment rate generally falls when the growth rate of real GDP is above average and generally increases when the growth rate of real GDP is below average. 5. Job creation and destruction, as well as voluntary job separations, lead t ...
... 4. The unemployment rate is affected by the business cycle. The unemployment rate generally falls when the growth rate of real GDP is above average and generally increases when the growth rate of real GDP is below average. 5. Job creation and destruction, as well as voluntary job separations, lead t ...
Policy options at the zero lower bound
... – major obstacle for investment in many EA countries are financial constraints on the side of the firms – non-performing loans (NPL) as a major source of frictions • limits the banks’ ability to lend to the real economy • lower profitability (due to higher provisioning needs), higher capital require ...
... – major obstacle for investment in many EA countries are financial constraints on the side of the firms – non-performing loans (NPL) as a major source of frictions • limits the banks’ ability to lend to the real economy • lower profitability (due to higher provisioning needs), higher capital require ...
Liquidity Traps and the Stability of Money Demand: Is Japan Really
... prices are still gradually declining. All these observations seem consistent with the broad definition of liquidity traps. 1 Perhaps more controversial is whether the Japanese economy has already reached the lower zero bound on nominal interest rates. Krugman (1999) refers to liquidity traps as a si ...
... prices are still gradually declining. All these observations seem consistent with the broad definition of liquidity traps. 1 Perhaps more controversial is whether the Japanese economy has already reached the lower zero bound on nominal interest rates. Krugman (1999) refers to liquidity traps as a si ...
A Balance Sheet Approach to Financial Crisis - Mark Allen
... An economy’s resilience to a range of shocks, including financial shocks, hinges in part on the composition of the country’s stock of liabilities and assets. The country’s aggregate balance sheet—the external liabilities and liquid external assets of all sectors of the economy—is vital. But it is of ...
... An economy’s resilience to a range of shocks, including financial shocks, hinges in part on the composition of the country’s stock of liabilities and assets. The country’s aggregate balance sheet—the external liabilities and liquid external assets of all sectors of the economy—is vital. But it is of ...
Shifting gear: why have neutral interest rates fallen?
... 5. Measurement of neutral interest rates We have seen these changes in the real economy, but how in practice do we estimate the level of the neutral interest rate? Neutral interest rates are not observable in the way that the 90-day rate or retail interest rates are. Instead, neutral has to be infer ...
... 5. Measurement of neutral interest rates We have seen these changes in the real economy, but how in practice do we estimate the level of the neutral interest rate? Neutral interest rates are not observable in the way that the 90-day rate or retail interest rates are. Instead, neutral has to be infer ...
Aggregate Disturbances, Monetary Policy, and the Macroeconomy: The FRB/US Perspective
... average of the funds rate expected well into the future. The remaining term, wt, denotes the premium paid to investors to compensate for uncertainty in the future course of short-term interest rates and for the chance of default. Given this arbitrage relationship—which is assumed to hold at all time ...
... average of the funds rate expected well into the future. The remaining term, wt, denotes the premium paid to investors to compensate for uncertainty in the future course of short-term interest rates and for the chance of default. Given this arbitrage relationship—which is assumed to hold at all time ...
Excess money growth and inflation dynamics
... of sustained monetary expansion. The analysis of the interrelationships among money, credit and asset prices, which can be dated at least as back as Kindleberger (1978), has recently regained relevance in the current context of low and stable inflation in almost all industrialised economies. In suc ...
... of sustained monetary expansion. The analysis of the interrelationships among money, credit and asset prices, which can be dated at least as back as Kindleberger (1978), has recently regained relevance in the current context of low and stable inflation in almost all industrialised economies. In suc ...
Chap 27
... Monetary policy shares the limitations of fiscal policy, except that there is no law-making time lag or uncertainty. It also has the additional limitation that the effects of monetary policy are long drawn out, indirect, and depend on responsiveness of spending to interest rates. These effects are a ...
... Monetary policy shares the limitations of fiscal policy, except that there is no law-making time lag or uncertainty. It also has the additional limitation that the effects of monetary policy are long drawn out, indirect, and depend on responsiveness of spending to interest rates. These effects are a ...
ECONOMIC SURVEY OF NORWAY 2007: MONETARY
... adverse implications for future output. Rising interest rates will – to the extent that the increase is unexpected – trigger an adjustment of these imbalances, but since mortgages are overwhelmingly flexible rate, this too could quickly tighten borrowers’ budget constraints and produce financial dis ...
... adverse implications for future output. Rising interest rates will – to the extent that the increase is unexpected – trigger an adjustment of these imbalances, but since mortgages are overwhelmingly flexible rate, this too could quickly tighten borrowers’ budget constraints and produce financial dis ...
Preview Sample 3
... What is the cost of going to college? The obvious costs are the costs of tuition, fees, and textbooks. The obvious costs of going to college do not include room and board because these costs will be incurred no matter what you do—go to work or go to school. The biggest cost of going to college is fo ...
... What is the cost of going to college? The obvious costs are the costs of tuition, fees, and textbooks. The obvious costs of going to college do not include room and board because these costs will be incurred no matter what you do—go to work or go to school. The biggest cost of going to college is fo ...
THE INTERNATIONALISATION OF THE YEN: ESSENTIAL ISSUES
... italics) illustrates the government’s caution not to encroach on the vested interests of parties involved in the existing markets. Its cautionary approach resulted in delays in taking measures necessary for the internationalisation of the yen and at times emasculated the efforts. The Current Status ...
... italics) illustrates the government’s caution not to encroach on the vested interests of parties involved in the existing markets. Its cautionary approach resulted in delays in taking measures necessary for the internationalisation of the yen and at times emasculated the efforts. The Current Status ...
What Can Exchange Rates Tell Us?
... 2. As noted by Goldstein and Mussa, the high-water mark to date for Bergsten’s championing of target zones was reached when he persuaded 10 of 28 members of a Council on Foreign Relations (1969) task force on the global financial system to support his dissent from the majority position and join him ...
... 2. As noted by Goldstein and Mussa, the high-water mark to date for Bergsten’s championing of target zones was reached when he persuaded 10 of 28 members of a Council on Foreign Relations (1969) task force on the global financial system to support his dissent from the majority position and join him ...
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... infant industry cases, terms of trade effects and the interdependence of investment decisions. Such a more rational system could be based on a combination of a uniform tariff, a domestic value added tax system, and direct subsidies. It would be not only self-financing, but also far easier to adminis ...
... infant industry cases, terms of trade effects and the interdependence of investment decisions. Such a more rational system could be based on a combination of a uniform tariff, a domestic value added tax system, and direct subsidies. It would be not only self-financing, but also far easier to adminis ...
06A - Department Of Economics
... • Do not forget to write your full name, student number and section on the top. • Turn off your cell phone and put it away. During the exam if you are seen with a cell phone, on or off, your exam will be taken away instantaneously. • Put away all your lecture notes, books, etc. • There are 60 multip ...
... • Do not forget to write your full name, student number and section on the top. • Turn off your cell phone and put it away. During the exam if you are seen with a cell phone, on or off, your exam will be taken away instantaneously. • Put away all your lecture notes, books, etc. • There are 60 multip ...
A Bayesian Look at New Open Economy Macroeconomics
... deviations from the law of one price, and that international asset markets are incomplete. Since the linearized version of the model would imply non-stationarity due to foreign asset accumulation, he introduces portfolio adjustment costs which render the dynamics stationary. Bergin applies the model ...
... deviations from the law of one price, and that international asset markets are incomplete. Since the linearized version of the model would imply non-stationarity due to foreign asset accumulation, he introduces portfolio adjustment costs which render the dynamics stationary. Bergin applies the model ...
increase
... a. The decrease in full-employment output caused by an increase in taxes b. the decrease in consumption or private investment spending caused by an increase in government spending c. The decrease in government spending caused by a decrease in taxes d. The increase in the amount of capital outflow ca ...
... a. The decrease in full-employment output caused by an increase in taxes b. the decrease in consumption or private investment spending caused by an increase in government spending c. The decrease in government spending caused by a decrease in taxes d. The increase in the amount of capital outflow ca ...
Effects of Inflation
... Lower than anticipated inflation raises the real wage rate and workers gain at the expense of employers. Higher than anticipated inflation lowers the real wage rate, increases the quantity of labor demanded, makes jobs easier to find, and lowers the unemployment rate. Lower than anticipated inflatio ...
... Lower than anticipated inflation raises the real wage rate and workers gain at the expense of employers. Higher than anticipated inflation lowers the real wage rate, increases the quantity of labor demanded, makes jobs easier to find, and lowers the unemployment rate. Lower than anticipated inflatio ...
Exchange rate
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In finance, an exchange rate (also known as a foreign-exchange rate, forex rate, FX rate or Agio) between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency. For example, an interbank exchange rate of 119 Japanese yen (JPY, ¥) to the United States dollar (US$) means that ¥119 will be exchanged for each US$1 or that US$1 will be exchanged for each ¥119. In this case it is said that the price of a dollar in terms of yen is ¥119, or equivalently that the price of a yen in terms of dollars is $1/119.Exchange rates are determined in the foreign exchange market, which is open to a wide range of different types of buyers and sellers where currency trading is continuous: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday. The spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.In the retail currency exchange market, a different buying rate and selling rate will be quoted by money dealers. Most trades are to or from the local currency. The buying rate is the rate at which money dealers will buy foreign currency, and the selling rate is the rate at which they will sell the currency. The quoted rates will incorporate an allowance for a dealer's margin (or profit) in trading, or else the margin may be recovered in the form of a commission or in some other way. Different rates may also be quoted for cash (usually notes only), a documentary form (such as traveler's cheques) or electronically (such as a credit card purchase). The higher rate on documentary transactions has been justified to compensate for the additional time and cost of clearing the document, while the cash is available for resale immediately. Some dealers on the other hand prefer documentary transactions because of the security concerns with cash.