【PPT精品课件】货币金融学7版英文课件--ch27-大学课
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【PPT精品课件】货币金融学7版英文课件--7-大学课件20
Unfavorable Evidence 1. Small-firm effect: small firms have abnormally high returns 2. January effect: high returns in January 3. Market overreaction 4. Excessive volatility 5. Mean reversion 6. New information is not always immediately incorporated into stock prices
7-2
Generalized Dividend Valuation Model
P0
D1 (1 ke )1
D2 (1 ke )2
Dn Pn (1 ke )n (1 ke )n
(2)
• Since last term of the equation is small, Equation 2 can b t 1
Dt (1 ke )t
(3)
© 2005 Pearson Education Canada Inc.
7-3
Gordon Growth Model
• Assuming dividend growth is constant, Equation 3 can be written as
Xe = Xof 2 reasons expectation may not be rational
1. Not best prediction 2. Not using available information Rational expectation, although optimal prediction, may not be accurate Rational expectations makes sense because is costly not to have optimal forecast Implications: 1. Change in way variable moves, way expectations are formed changes 2. Forecast errors on average = 0 and are not predictable
《货币金融学》PPT课件
金融市场的参与者 包括政府、企业、个人、金融机构等。
3
金融市场的基本功能 资金融通、风险管理、价格发现和信息传递等。
金融市场的监管与风险控制
金融市场监管的必要性
01
维护市场秩序、保护投资者利益、防范金融风险等。
金融市场监管的主要内容
02
市场准入监管、业务运营监管和市场退出监管等。
金融风险的控制与管理
重塑金融竞争格局
金融科技的发展使得新兴金融科技 企业快速崛起，对传统金融机构形 成竞争压力，重塑金融竞争格局。
THANKS
感谢观看
货币等职能。
01
流通手段
货币充当商品交换媒介的职能。
03
贮藏手段
货币退出流通领域作为社会财富的一般代表 被保存起来的职能。
05
02
价值尺度
货币作为表现和衡量其他一切商品价值的尺 度。
04
支付手段
货币作为独立的价值形式进行单方面 运动（如清偿债务、缴纳税款、支付 工资和租金等）时所执行的职能。
06
世界货币 货币在世界市场上执行一般等价物作用的职能。
保险公司
提供各类保险产品和服务，帮 助个人和企业规避风险。
其他金融机构
包括基金管理公司、期货公司、 金融租赁公司等，提供各自领 域的专业金融服务。
金融业务的种类与流程
银行业务
包括存取款、贷款、转账、理财 等，流程一般为申请、审核、办
理和后续服务。
证券业务
包括股票、债券等证券的发行、 交易和投资咨询，流程包括开户、 交易、结算等环节。
金融创新使得金融监管面临新的挑战，如何有效监管成为难题。
金融不稳定因素增多
金融创新可能引发金融市场的波动，增加金融不稳定的因素。
3
金融市场的基本功能 资金融通、风险管理、价格发现和信息传递等。
金融市场的监管与风险控制
金融市场监管的必要性
01
维护市场秩序、保护投资者利益、防范金融风险等。
金融市场监管的主要内容
02
市场准入监管、业务运营监管和市场退出监管等。
金融风险的控制与管理
重塑金融竞争格局
金融科技的发展使得新兴金融科技 企业快速崛起，对传统金融机构形 成竞争压力，重塑金融竞争格局。
THANKS
感谢观看
货币等职能。
01
流通手段
货币充当商品交换媒介的职能。
03
贮藏手段
货币退出流通领域作为社会财富的一般代表 被保存起来的职能。
05
02
价值尺度
货币作为表现和衡量其他一切商品价值的尺 度。
04
支付手段
货币作为独立的价值形式进行单方面 运动（如清偿债务、缴纳税款、支付 工资和租金等）时所执行的职能。
06
世界货币 货币在世界市场上执行一般等价物作用的职能。
保险公司
提供各类保险产品和服务，帮 助个人和企业规避风险。
其他金融机构
包括基金管理公司、期货公司、 金融租赁公司等，提供各自领 域的专业金融服务。
金融业务的种类与流程
银行业务
包括存取款、贷款、转账、理财 等，流程一般为申请、审核、办
理和后续服务。
证券业务
包括股票、债券等证券的发行、 交易和投资咨询，流程包括开户、 交易、结算等环节。
金融创新使得金融监管面临新的挑战，如何有效监管成为难题。
金融不稳定因素增多
金融创新可能引发金融市场的波动，增加金融不稳定的因素。
【PPT精品课件】货币金融学7版英文课件--ch26-大学课
© 2005 Pearson Education Canada Inc.
26-7
Statistical Evidence
Horse race: correlation of A vs M with Y; Friedman and Meiselman, M wins
Criticisms:
1. Reverse causation from Y to M, or third factor driving
Recent work indicates that the exchange rate transmission mechanism plays an important role in how monetary policy affects the economy.
© 2005 Pearson Education Canada Inc.
M , Pe , e , ir , C and I , Y
© 2005 Pearson Education Canada Inc.
26-10
Monetary Transmission Mechanisms
Other Asset Channeቤተ መጻሕፍቲ ባይዱs
Exchange Rate Channel:
third factor: e.g., 1936–37 rise in reserve requirements and 1937-38 recession
© 2005 Pearson Education Canada Inc.
26-9
Monetary Transmission Mechanisms
3. Can predict effects of institutional changes that change link from M to Y
PPT精品课件货币金融学7版英文课件10大学课件2
Comparison with the U.S.
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Structure of the Commercial Banking Industry in the United States
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© 2005 Pearson Education Canada Inc.
© 2005 Pearson Education Canada Inc.
ห้องสมุดไป่ตู้
Avoidance of Existing Regulations
Regulations Behind Financial Innovation 1. Reserve requirements Tax on deposits = i r 2. Deposit-rate ceilings As i , loophole mine to escape reserve requirement tax and deposit-rate ceilings Examples 1. Money market mutual funds 2. Sweep accounts
(Continued)
© 2005 Pearson Education Canada Inc.
As of October 2002, there were 68 chartered banks in Canada and around 8000 in the United States The presence of so many banks in the U.S. reflects past regulations that restricted the ability of these financial institutions to open branches Many small U.S. banks stayed in existence because a large bank capable of driving them out of business was often restricted from opening a branch nearby It was easier for a bank to open a branch in a foreign country than in another state in the U.S.
© 2005 Pearson Education Canada Inc.
Structure of the Commercial Banking Industry in the United States
© 2005 Pearson Education Canada Inc.
© 2005 Pearson Education Canada Inc.
© 2005 Pearson Education Canada Inc.
ห้องสมุดไป่ตู้
Avoidance of Existing Regulations
Regulations Behind Financial Innovation 1. Reserve requirements Tax on deposits = i r 2. Deposit-rate ceilings As i , loophole mine to escape reserve requirement tax and deposit-rate ceilings Examples 1. Money market mutual funds 2. Sweep accounts
(Continued)
© 2005 Pearson Education Canada Inc.
As of October 2002, there were 68 chartered banks in Canada and around 8000 in the United States The presence of so many banks in the U.S. reflects past regulations that restricted the ability of these financial institutions to open branches Many small U.S. banks stayed in existence because a large bank capable of driving them out of business was often restricted from opening a branch nearby It was easier for a bank to open a branch in a foreign country than in another state in the U.S.
货币金融学ppt课件
01
02
03
04
银本位制
以白和白银同时作为本位货 币的货币制度。
金本位制
以黄金为本位货币的货币制度 。
纸币本位制
又称不兑现的信用货币制度， 是以不兑现的纸币为本位货币
的货币制度。
国际货币体系
国际金本位制度
以黄金作为国际储备货币或国际本位货币的国际货币制度。
国际资本流动，无论是流入还是流出，都会对一国的经济产生重大影响 ，如果管理不当，很容易引发金融危机。
05
金融风险与金融监管
金融风险的类型与识别
市场风险
由于市场价格变动（如利率、 汇率、股票价格等）而导致的 损失风险。
流动性风险
由于市场流动性不足或资金筹 措困难而导致的损失风险。
信用风险
由于借款人或交易对手违约而 导致的损失风险。
汇率制度的类型与特点
固定汇率制度
指一国货币同另一国货币的兑换 比率基本固定的汇率制度。
浮动汇率制度
指一国货币当局不规定本国货币 与其他国家货币之间的官方汇率 ，听任汇率由外汇市场供求关系
自发地决定。
管理浮动汇率制度
又称“肮脏浮动汇率制”，指一 国货币当局为了控制或减缓本国 货币对外汇率的波动，而采取的 各种形式和不同程度的干预市场
货币金融学ppt课 件
目录
• 货币与货币制度 • 金融市场与金融机构 • 货币政策与宏观调控 • 国际金融与汇率制度 • 金融风险与金融监管 • 金融科技与未来金融发展
01
货币与货币制度
货币的定义与职能
货币的定义
货币是充当一般等价物的特殊商品，具有价值 尺度、流通手段、支付手段、贮藏手段和世界
金融机构的业务
涵盖存款、贷款、投资、保险、汇款 等多元化金融服务，满足企业和个人 的金融需求。
2020年【PPT课件】货币金融学7版英文课件--ch27-大学课模板可编辑
growth only causes P , but not sustained
2. Figure 4 shows that supply shock does not lead to sustained
© 2005 Pearson Education Canada Inc.
5
Response to One-Shot Increase in G
again, and go through steps 2, 3, and 4, etc. 5. P continually: i.e., get
© 2005 Pearson Education Canada Inc.
8
Demand-Pull Inflation
High Employment
Target, YT > Yn 1. Y = Yn < YT,
Allows for other sources of AD shifts, but comes to
same conclusion that only source of sustained high is Ms growth 1. Figure 3 shows that fiscal policy without Ms
High Employment Target at Yn
1. Workers raise wages because either: want higher real wages or e high
2. AS shifts in 3. Y < Yn, government
shifts AD out 4. Workers raise wages
9
Budget Deficits and
2. Figure 4 shows that supply shock does not lead to sustained
© 2005 Pearson Education Canada Inc.
5
Response to One-Shot Increase in G
again, and go through steps 2, 3, and 4, etc. 5. P continually: i.e., get
© 2005 Pearson Education Canada Inc.
8
Demand-Pull Inflation
High Employment
Target, YT > Yn 1. Y = Yn < YT,
Allows for other sources of AD shifts, but comes to
same conclusion that only source of sustained high is Ms growth 1. Figure 3 shows that fiscal policy without Ms
High Employment Target at Yn
1. Workers raise wages because either: want higher real wages or e high
2. AS shifts in 3. Y < Yn, government
shifts AD out 4. Workers raise wages
9
Budget Deficits and
【PPT精品课件】货币金融学7版英文课件--2-大学课件20
© 2005 Pearson Education Canada Inc.
2-3
Internationalization of Financial Markets
International Bond Market 1. Foreign bonds 2. Eurobonds
Now larger than U.S. corporate bond market World Stock Markets
Financial Intermediaries 1. Engage in process of indirect finance 2. More important source of finance than securities markets 3. Needed because of transactions costs and asymmetric
A. Decreases adverse selection and moral hazard problems
B. Securities commissions force corporations to disclose information
2. Ensuring the soundness of financial intermediaries
1. Exchanges
Trades conducted in central locations (e.g., Toronto Stock Exchange and New York Stock Exchange)
2. Over-the-Counter Markets
Dealers at different locations buy and sell
《货币金融学》ppt课件
货币本身: 价值和职能 ↓转化 生息资本→利率问题
货币资本｛ 经营资本〔主要是金融资本〕
前言
二, 货币资本的微观运动
金融市场和工具
金融机构↗商业银行, 保险公司,证券公司,各种基
金
↘中央银行
前言
三, 货币资本的宏观运动
货币供给与货币需求 货币政策
四, 金融与经济开展
开展中国家的金融压抑到金融自由化
货币金融学
前言
研究对象
货币和货币资本的微观和客观运动规律.
微观上: 要说明的是货币,由货币转化的生息资本,及 对资本进展运营的金融业的作用和运动情况,
宏观上: 国家如何通过控制货币资金的供给和需求, 从而影响其价格和总量, 以此来干预宏观经济.前言学习 Nhomakorabea框架,体系
一,货币和货币资本的根本理论
货币资本｛ 经营资本〔主要是金融资本〕
前言
二, 货币资本的微观运动
金融市场和工具
金融机构↗商业银行, 保险公司,证券公司,各种基
金
↘中央银行
前言
三, 货币资本的宏观运动
货币供给与货币需求 货币政策
四, 金融与经济开展
开展中国家的金融压抑到金融自由化
货币金融学
前言
研究对象
货币和货币资本的微观和客观运动规律.
微观上: 要说明的是货币,由货币转化的生息资本,及 对资本进展运营的金融业的作用和运动情况,
宏观上: 国家如何通过控制货币资金的供给和需求, 从而影响其价格和总量, 以此来干预宏观经济.前言学习 Nhomakorabea框架,体系
一,货币和货币资本的根本理论
[经济学]货币金融学英文课件Lecture
![[经济学]货币金融学英文课件Lecture](https://img.taocdn.com/s3/m/25775f0ce418964bcf84b9d528ea81c758f52e87.png)
货币政策与物价
货币供应量对物价的影响。利率将如何 影响货币供给？
货币和金融政策的互动
当央行调整汇率或货币供应量，商业银 行和金融市场会如何回应？
货币市场
现金市场
发债工具：短期国库券、商业票 据和银行存款证券。
货币市场
货币市场资产：长期的国库券、 企业债券和金融工具。
资本市场
股票、期货和其他交易所交易金 融产品。
分析汇率和外汇交易如何影响国际贸易。
2
衍生工具
期权、期货等衍生品是如何影响金融市场的？
3
证券市场
通过股票、债券、REITs等投资在证券市场获得的回报。
国际金融
1 汇率风险
2 国际收支平衡
3 全球金融稳定
汇率波动会如何影响跨国 贸易境内和境外银行资产？
什么驱动着跨国收支平衡？ 国内储蓄如何影响国外贷 款？
中央银行的作用
货币印制和分发
中央银行负责发行和分发货币的全过程。
外汇储备
中央银行负责管理国家的外汇储备，用于干预汇 率。
贷款和市场干预
中央银行可以通过调整贷款利率、购买和出售证 券等方式干预市场。
资本充足率监管
中央银行通过监管来确保银行的资本充足率，从 而提高金融系统的健康度。
金融工具
1
外汇和汇率
货币金融学 : 从入门到精 通
本课件中，你将学习货币金融学的基础知识，理解货币的定义和特征，学习 如何定量宏观经济政策以及探究国际金融体系。
货币与财政政策的影响
财政政策和经济增长
2
减税和支出政策：如何影响消费和生产？
3
非常规货币政策
4
量化宽松政策、负利率和 0 利率政策： 如何应对复杂的经济情况？
PPT精品课件货币金融学7版英文课件20大学课件214769
© 2005 Pearson Education Canada Inc.
1
Exchange Market Intervention
Sterilized: To reduce MB back to old level, Bank of Canada sells $1 billion of government bonds
2. Ms , P , Eet+1 , expected appreciation of F , RF shifts right in Fig. 1
3. Ms , iD , RD shifts left, go to point 2 and Et
4. In long run, iD returns to old level, RD shifts back, go to point 3: Exchange rate overshooting
2. Monetary base unchanged
3. Et unchanged: no shift in RD and RF
© 2005 Pearson Education Canada Inc.
2
Exchange Rate Intervention, Sell $
1. Sell $, buy F: MB , Ms
5. When UK pulls out of ERM, £ 10%, big losses to central bank
© 2005 Pearson Education Canada Inc.
9
International Financial Architecture
Capital Controls
3. If don’t do this, have to revalue
【PPT精品课件】货币金融学7版英文课件ch26大学课
3. Surveys: no link from i to I
Objections to Keynesian evidence
Problems with structural model
1. i on T-bonds not representative during Depression: i very high on low-grade bonds: Figure 1 in Ch. 6
2. ir more relevant than i: ir high during Depression:Depression (Friedman and Schwartz): money
“tight”
4. Wrong structural model to look at link of i and I, should
Great Depression 2. Documents timing evidence More convincing than other monetarist evidence: Episodes are almost like “controlled experiments” 1. Post hoc, ergo propter hoc applies 2. History allows ruling out of reverse causation and
3. Can predict effects of institutional changes that change link from M to Y
Disadvantages:
1. Structural model may be wrong, negating all advantages
【PPT精品课件】货币金融学7版英文课件--ch27-大学课
government shifts
AD out
2. Y = YT > Yn, AS shifts in
3. Y = Yn < YT, government shifts
AD out, and repeat
steps 2 and 3, etc.
4. P continually:
i.e., get
© 2005 Pearson Education Canada Inc.
again, and go through steps 2, 3, and 4, etc. 5. P continually: i.e., get
© 2005 Pearson Education Canada Inc.
8
Demand-Pull Inflation
High Employment
Target, YT > Yn 1. Y = Yn < YT,
Chapter 27
Money and Inflation
© 2005 Pearson Education Canada Inc.
Money and Inflation: The Evidence
“Inflation is Always and Everywhere a Monetary Phenomenon” (M. Friedman)
Allows for other sources of AD shifts, but comes to
same conclusion that only source of sustained high is Ms growth 1. Figure 3 shows that fiscal policy without Ms
AD out
2. Y = YT > Yn, AS shifts in
3. Y = Yn < YT, government shifts
AD out, and repeat
steps 2 and 3, etc.
4. P continually:
i.e., get
© 2005 Pearson Education Canada Inc.
again, and go through steps 2, 3, and 4, etc. 5. P continually: i.e., get
© 2005 Pearson Education Canada Inc.
8
Demand-Pull Inflation
High Employment
Target, YT > Yn 1. Y = Yn < YT,
Chapter 27
Money and Inflation
© 2005 Pearson Education Canada Inc.
Money and Inflation: The Evidence
“Inflation is Always and Everywhere a Monetary Phenomenon” (M. Friedman)
Allows for other sources of AD shifts, but comes to
same conclusion that only source of sustained high is Ms growth 1. Figure 3 shows that fiscal policy without Ms
【PPT精品课件】货币金融学7版英文课件--1-大学课件20
6. Aggregate supply and demand analysis
Features
1. Case studies
2. Applications
3. Special-interest boxes
4. Following the Financial News boxes
5. Reading the financial pages
© 2005 Pearson Education Canada Inc.
1-10
How We Study Money and Banking
Basic Analytic Framework
1. Simplified approach to the demand for assets
2. Concept of equilibrium
2. Affect personal wealth and behavior of business firms
Why Study Banking and Financial Institutions?
1. Financial Intermediation Helps get funds from savers to investors
2. Banks and Money Supply Crucial role in creation of money
3. Financial Innovation
Why Study Money and Monetary Policy?
1. Influence on business cycles, inflation, and interest rates
nominal GDP GDP Deflator = real GDP
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1. M continually, shifts AD to right from AD1 to AD2 to AD3, etc. 2. Y > Yn, wages , AS shifts to left from AS1 to AS2 to AS3, etc. 3. P continually rises from P1 to P2 to P3, etc.: i.e., have inflation
Budget deficits in other countries 1. Bond finance hard 2. Deficit likely to lead to money creation and
Budget deficits in U.S. 1. Large capital market, so can bond finance 2. Fed has choice whether to monetize deficit, but may be
Conclusion: Deficit , only if it is
1. Persistent 2. Financed by money creation rather than by bonds
© 2005 Pearson Edu来自ation Canada Inc.
27-10
Budget Deficits and
again, and go through steps 2, 3, and 4, etc. 5. P continually: i.e., get
© 2005 Pearson Education Canada Inc.
27-8
Demand-Pull Inflation
High Employment
pressured to do so 3. Ricardian equivalence may mean no effect of budget
deficits on interest rates
Conclusion: Deficits do not necessarily
© 2005 Pearson Education Canada Inc.
Financing persistent budget deficit by money creation leads to sustained 1. Deficit financed by Ms leads to AD shifts out, as in Fig 27.2 2. If deficit persists, Ms continually and get P continually, i.e., as in Fig 27.2
27-11
Budget Deficits and Interest Rates
© 2005 Pearson Education Canada Inc.
27-12
Inflation and Money Growth
1. Money and inflation relationship close until 1980 2. After 1980 relationship breaks down
© 2005 Pearson Education Canada Inc.
27-4
Monetarist and Keynesian Views of
Monetarist View Only source of AD shifts and in Figure 2 can be Ms growth
Keynesian View
Allows for other sources of AD shifts, but comes to
same conclusion that only source of sustained high is Ms growth 1. Figure 3 shows that fiscal policy without Ms
government prints money to pay strikers, > 1 million %
Meaning of “inflation”
Friedman’s statement uses definition of as continuing, rapidly
rising price level: Only then does evidence support it
G permanently
1. AD shifts right to
AD2 2. Y > Yn, AS shifts in
to AS2 3. P to P2, but
doesn’t keep rising
© 2005 Pearson Education Canada Inc.
27-6
Response to Supply Shock
© 2005 Pearson Education Canada Inc.
27-2
German Hyperinflation: 1921–23
© 2005 Pearson Education Canada Inc.
27-3
Response to Continually Rising Ms
Monetarist and Keynesian View
27-13
Government Debt to GDP
1. Debt/GDP falls 1960–80 2. Deficits can’t be source of money creation and
© 2005 Pearson Education Canada Inc.
27-14
Unemployment and the Natural Rate of Unemployment
© 2005 Pearson Education Canada Inc.
27-17
Choice Between Activist and Nonactivist Policy
© 2005 Pearson Education Canada Inc.
27-18
Rules vs Discretion 1. Nonactivists advocate policy rule to keep AD from fluctuating:
Example: Monetarist constant-money-growth-rate-rule 2. Credibility of nonaccommodating policy helps avoid wage push and helps
growth only causes P , but not sustained
2. Figure 4 shows that supply shock does not lead to sustained
© 2005 Pearson Education Canada Inc.
27-5
Response to One-Shot Increase in G
© 2005 Pearson Education Canada Inc.
27-15
Activist/Nonactivist Debate
© 2005 Pearson Education Canada Inc.
27-16
Activist/Nonactivist Debate
Case for nonactivist policy stronger if expectations of policy matter 1. Economy won’t stop at point 2 2. Wages , AS shifts in, Y < Yn, AD shifted out, etc.: 3. Also less likely for wage push that gets us to 1' Quite plausible that expectations of policy matter to wage setting
High employment targets source of 1960-80
1. U < Un 1965-73 suggests demand-pull , with YT > Yn 2. U > Un 1974-80 suggests cost-push 3. U > Un and after 1980
Negative Supply Shock
1. AS shifts in to AS2 2. Y < Yn, wages , AS
shifts back to AS1 3. P unchanged, no
© 2005 Pearson Education Canada Inc.
27-7
Cost-Push Inflation
Chapter 27
Money and Inflation
© 2005 Pearson Education Canada Inc.
Money and Inflation: The Evidence
“Inflation is Always and Everywhere a Monetary Phenomenon” (M. Friedman)
prevent and unemployment
Example: 1. In the period from 1965 through the 1970s , the Bank of Canada had low credibility and anti- policy was costly 2. Credibility earned by 1983 3. When money growth 1983, little rise in wages and
Budget deficits in other countries 1. Bond finance hard 2. Deficit likely to lead to money creation and
Budget deficits in U.S. 1. Large capital market, so can bond finance 2. Fed has choice whether to monetize deficit, but may be
Conclusion: Deficit , only if it is
1. Persistent 2. Financed by money creation rather than by bonds
© 2005 Pearson Edu来自ation Canada Inc.
27-10
Budget Deficits and
again, and go through steps 2, 3, and 4, etc. 5. P continually: i.e., get
© 2005 Pearson Education Canada Inc.
27-8
Demand-Pull Inflation
High Employment
pressured to do so 3. Ricardian equivalence may mean no effect of budget
deficits on interest rates
Conclusion: Deficits do not necessarily
© 2005 Pearson Education Canada Inc.
Financing persistent budget deficit by money creation leads to sustained 1. Deficit financed by Ms leads to AD shifts out, as in Fig 27.2 2. If deficit persists, Ms continually and get P continually, i.e., as in Fig 27.2
27-11
Budget Deficits and Interest Rates
© 2005 Pearson Education Canada Inc.
27-12
Inflation and Money Growth
1. Money and inflation relationship close until 1980 2. After 1980 relationship breaks down
© 2005 Pearson Education Canada Inc.
27-4
Monetarist and Keynesian Views of
Monetarist View Only source of AD shifts and in Figure 2 can be Ms growth
Keynesian View
Allows for other sources of AD shifts, but comes to
same conclusion that only source of sustained high is Ms growth 1. Figure 3 shows that fiscal policy without Ms
government prints money to pay strikers, > 1 million %
Meaning of “inflation”
Friedman’s statement uses definition of as continuing, rapidly
rising price level: Only then does evidence support it
G permanently
1. AD shifts right to
AD2 2. Y > Yn, AS shifts in
to AS2 3. P to P2, but
doesn’t keep rising
© 2005 Pearson Education Canada Inc.
27-6
Response to Supply Shock
© 2005 Pearson Education Canada Inc.
27-2
German Hyperinflation: 1921–23
© 2005 Pearson Education Canada Inc.
27-3
Response to Continually Rising Ms
Monetarist and Keynesian View
27-13
Government Debt to GDP
1. Debt/GDP falls 1960–80 2. Deficits can’t be source of money creation and
© 2005 Pearson Education Canada Inc.
27-14
Unemployment and the Natural Rate of Unemployment
© 2005 Pearson Education Canada Inc.
27-17
Choice Between Activist and Nonactivist Policy
© 2005 Pearson Education Canada Inc.
27-18
Rules vs Discretion 1. Nonactivists advocate policy rule to keep AD from fluctuating:
Example: Monetarist constant-money-growth-rate-rule 2. Credibility of nonaccommodating policy helps avoid wage push and helps
growth only causes P , but not sustained
2. Figure 4 shows that supply shock does not lead to sustained
© 2005 Pearson Education Canada Inc.
27-5
Response to One-Shot Increase in G
© 2005 Pearson Education Canada Inc.
27-15
Activist/Nonactivist Debate
© 2005 Pearson Education Canada Inc.
27-16
Activist/Nonactivist Debate
Case for nonactivist policy stronger if expectations of policy matter 1. Economy won’t stop at point 2 2. Wages , AS shifts in, Y < Yn, AD shifted out, etc.: 3. Also less likely for wage push that gets us to 1' Quite plausible that expectations of policy matter to wage setting
High employment targets source of 1960-80
1. U < Un 1965-73 suggests demand-pull , with YT > Yn 2. U > Un 1974-80 suggests cost-push 3. U > Un and after 1980
Negative Supply Shock
1. AS shifts in to AS2 2. Y < Yn, wages , AS
shifts back to AS1 3. P unchanged, no
© 2005 Pearson Education Canada Inc.
27-7
Cost-Push Inflation
Chapter 27
Money and Inflation
© 2005 Pearson Education Canada Inc.
Money and Inflation: The Evidence
“Inflation is Always and Everywhere a Monetary Phenomenon” (M. Friedman)
prevent and unemployment
Example: 1. In the period from 1965 through the 1970s , the Bank of Canada had low credibility and anti- policy was costly 2. Credibility earned by 1983 3. When money growth 1983, little rise in wages and