巴罗 宏观经济学 ppt 11

Macroeconomics
Chapter 11
23
Inflation and Interest Rates
Actual and Expected Real Interest Rates
The expected inflation rate determines the expected real interest rate, ret r e t = it − π e t
Milton Friedman’s famous dictum:
“Inflation is always and everywhere a monetary phenomenon.”
Macroeconomics
Chapter 11
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Inflation and Interest Rates
Actual and Expected Inflation
Chapter11 Inflation, Money Growth, and Interest Rates
Macroeconomics
Chapter 11
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Cross-Country Data on Inflation and Money Growth
Key equation:
Ms = P· L(Y, i)
Macroeconomics
Chapter 11
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Inflation and Interest Rates
Actual and Expected Inflation
Households try to keep the errors as small as possible. Therefore, they use available information on past inflation and other variables to avoid systematic mistakes. Expectations formed this way are called rational expectations.
Macroeconomics
Chapter 11
19
Inflation and Interest Rates
Real and Nominal Interest Rates
Since the real interest rate, denoted by r1, is the rate at which assets held as bonds change in real value: (1+r1) = (1+i1)/(1+π1)
Macroeconomics
Chapter 11
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Macroeconomics
Chapter 11
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Macroeconomics
Chapter 11
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Macroeconomics
Chapter 11
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Cross-Country Data on Inflation and Money Growth
Macroeconomics
Chapter 11
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Cross-Country Data on Inflation and Money Growth
Highlights
In most countries, the growth rate of nominal currency, M, exceeded the growth rate of prices. For a country that has a high inflation rate in one period to have a high inflation rate in another period. Strong positive association between the inflation rate and the growth rate of nominal currency.
Let π be the inflation rate. The inflation rate from year 1 to year 2, π1, is the ratio of the change in the price level to the initial price level. π1 = ( P2 − P1)/ P1 π1 = ∆P1/ P1
real interest rate= nominal interest rate− inflation rate
r1 = i1 − π1
Macroeconomics Chapter 11 21
Inflation and Interest Rates
Fisher Equation
i = r +π
Fisher Effecter 11
9
Cross-Country Data on Inflation and Money Growth
Macroeconomics
Chapter 11
10
Cross-Country Data on Inflation and Money Growth
One lesson from the cross-country data is that, to understand inflation, we have to include money growth as a central part of the analysis.
Macroeconomics
Chapter 11
18
Inflation and Interest Rates
Real and Nominal Interest Rates
(dollar assets in year2/P2 )= (dollar assets in year1/P1) · (1+i1)/(1+π1) real assets in year2 = (real assets in year1) · (1+i1)/(1+π1)
expected real interest rate= nominal interest rate − expected inflation rate
i
π
Macroeconomics
Chapter 11
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Inflation and Interest Rates
The Real Interest Rate and Intertemporal Substitution
When the inflation rate, π, is not zero, it is the real interest rate, r, rather than the nominal rate, i, that matters for intertemporal substitution.
Macroeconomics
Chapter 11
7
Cross-Country Data on Inflation and Money Growth
Highlights
The median inflation rate from 1960 to 2000 was 8.3% per year, with 30 countries exceeding 10%. For the growth rate of nominal currency, the median was 11.6% per year, with 50 above 10%
Inflation rates and money growth rates for 82 countries from 1960 to 2000. We measure the price level, P, by the consumer price index (CPI). We use the CPI, rather than the GDP deflator, because of data availability.
Highlights
The inflation rate was greater than 0 for all countries from 1960 to 2000 The growth rate of nominal currency was greater than 0 for all countries from 1960 to 2000. There is a broad cross-sectional range for the inflation rates and the growth rates of money.
Macroeconomics
Chapter 11
16
Inflation and Interest Rates
Macroeconomics
Chapter 11
17
Inflation and Interest Rates
Real and Nominal Interest Rates
The Real interest rate to be the rate at which the real value of assets held as bonds changes over time. dollar assets in year2 = ( dollar assets in year1)·(1+ i1) P2 = P1 · ( 1 + π1)
Macroeconomics
Chapter 11
15
Inflation and Interest Rates
Real and Nominal Interest Rates
The dollar value of assets held as bonds rises over the year by the factor 1 + i1. The interest rate i1 is the dollar or nominal interest rate because i1 determines the change over time in the nominal value of assets held as bonds.