Money and Inflation
mankiw7e-chap04
Velocity
basic concept:
the rate at which money circulates
definition: the number of times the average
dollar bill changes hands in a given time period
3%
0%
-3% 1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
The connection between money and prices Inflation rate = the percentage increase
in the average level of prices.
6
The central bank
Monetary policy is conducted by a country’s
central bank.
In the U.S., the central bank is called the
Federal Reserve (“the Fed”).
In China, the central bank is People’s Bank of
20
The quantity theory of money, cont.
M
M
Y
Y
Y/Y depends on growth in the factors of production and on technological progress (all of which we take as given, for now). Hence, the Quantity Theory predicts a one-for-one relation between changes in the money growth rate and changes in the inflation rate.
货币增长与通货膨胀
货币供给、货币需求与均衡价格水平
Money Supply, Money Demand, and
the Equilibrium Price Level
Value of Money (1/P) 货币价值
货币供给 Money supply
(High高) 1
Price Level (P) 价格水平
1 (Low低)
物价水平 the average level of prices in the economy
产出 Production 利率 interest rates 信用卡与自动取款机的普及程度
the availability of credit cards and ATMs 10
货币需求
Money Demand
在过去70年里，价格平均每年上升约4个百分点。 Over the past seventy years, prices have risen on average about 5 percent per year.
通货紧缩，即平均价格的下降，在19世纪的美国 出现过。 Deflation, meaning decreasing average prices, occurred in the U.S. in the nineteenth century.
宏经小测题
宏经小测题第一次小测：（酒管班）判断题1.Changes in the GDP deflator reflect only changes in the prices of goods and services.2.In 2007, government purchases was the largest component of U.S. GDP.3.If someone in the United States buys a surfboard produced in Australia, then thatpurchase is included in both the consumption component of U.S. GDP and the netexports component of U.S. GDP.4.If consumption is $4000, exports are $300, government purchases are $1000, importsare $400, and investment is $800, then GDP is $5700.5.If nominal GDP is $12,000 and the GDP deflator is 80, then real GDP is $15,000.6.The CPI and GDP deflator usually tell two different stories about how quickly prices arerising.7.Substitution bias causes the CPI to understate the increase in the cost of living from oneyear to the next.8.If the nominal interest rates rises, then the inflation rate must have increased.9.An increase in the budget deficit shifts the demand for loanable funds to the right.10.If the quality of a good deteriorates from one year to the next while its price remainsthe same, then the value of a dollar fails.11. A decrease in taxes on interest income would increase the interest rate.12.The term loanable funds refers to all income that is not used for consumption.13.Bob deposits $100 in a bank account that pays an annual interest rate of 5 percent. Ayear later, Bob withdraws his $105. If deflation was 7 percent during the years, themoney was deposited, then Bob’s purchasing power increased by 2 percent.14. A firm might offer efficiency wages to reduce worker turnover and thereby reduceproduction cost.15.Unions are often thought to cause conflict between different groups of workersbetween the insider who benefit from high union wages and the outsiders who do notget the union jobs.16.Joan uses some of her income to buy mutual fund shares.A macroeconomist refers toJoan’s purchase as investment.17.When a minimum-wage law forces the wage to remain abo ve the level that balances’supply and demand, the result is a shortage of labor.18.Public policy cannot reduce the economy’s natural rate of unemployment.19.Other things the same, countries that offer more generous and longer-lastingunemployment rates, unemployment insurance benefits are likely to have higherunemployment rates.20.An increase in the demand for loanable funds increases the equilibrium interest rateand decreases the equilibrium level of saving.21.The term crowding out refers to decreases in the interest rate caused by governmentbudget surpluses.22.When Americans invest in Russia, the income of Russians(that is, Russian GDP) rises bymore than does production in Russia(that is , Russian GDP).23.When a firm wants to borrow directly from public to finance the purchases of newequipment, it does so by selling shares of bonds.24.If, for an imaginary closed economy, investment amounts to $12,000 and thegovernment is running a $2,000 deficit, then private saving must amount to $10,000. 25.In the U.S., when the price of oil rises, the CPI rises by much more than does the GDPdeflator.答案：TFTTT FFFFT FFFTT FFFTF FFTFT第二次小测：（酒管班）选择题1.When the money market is drawn with the value of money on the vertical axis, ifmoney demand shifts leftward, then initially there is an ( )A. excess demand for money which cause the price level to rise.B. excess demand for money which cause the price level to fall.C. excess supply for money which cause the price level to rise.D. excess supply for money which cause the price level to fall.2.The price level falls if either ( )A. money demand or money supply shifts rightward.B. money demand shifts rightward or money supply shifts leftward.C. money demand shifts leftward or money supply shifts rightward.D. money demand or money supply shifts leftward.3.As the price level rises, the value of money ( )A. falls, and people desire toe hold less of it.B. falls, and people desire toe hold more of it.C. rise, and people desire toe hold less of it.D. rise, and people desire toe hold more of it.4.To explain the long-run determinants of the price level and the inflation rate, mosteconomists today rely on the ( )A. quantity theory of money.B. price-index theory of money.C. theory of hyperinflation.D. disequilibrium theory of money and inflation.5.The supply curve of money is vertical because the quantity of money suppliedincreases( )A. when the value of money increases.B. when the value of money decreases.C. only if people desire to hold more money.D. only if the central bank increase the money supply.6.According to the classical dichotomy, which of the following is influenced by monetary( )A. real GDP.B. unemployment.C. nominal interest rates.D. All of above are correct.7.Wealth is redistributed form debtors to creditors when inflation was expected to be( )A. high and it turns out to be high.B. low and it turns out to be low.C. low and it turns out to be high.D. high and it turns out to be low.8.In Hum, the money supply is $8 million and reserves are $1 million. Assumption thatpeople hold only deposits and no currency, and that banks hold no excess reserves thanthe reserve requirement is ( )A. 14 percent.B. 12.5 percentC. 8 percentD. none of the above is correct.9. A bank’s ( )A.reserves and the deposits of its customers are both assets.B.reserves and the deposits of its customers are both liabilities.C. reserves are assets and the deposits of its customers are liabilities.D. reserves are liabilities and the deposits of its customers are assets.10.To decrease the money supply the Fed can ( )A. buy government bonds or increase the discount rate.B. buy government bonds or decrease the discount rate.C. sell government bonds or increase the discount rate.D. sell government bonds or decrease the discount rate.11.As the reserve ratio increases, the money multiplier ( )A. increase.B. does not change.C. decrease.D. could do any of the above.12.The money supply increases when the Fed ( )A. lowers the discount rates. The increase will be larger the smaller the reserve ratio is.B. lowers the discount rates. The increase will be larger the larger the reserve ratio is.C. rises the discount rates. The increase will be larger the smaller the reserve ratio is.D. rises the discount rates. The increase will be larger the larger the reserve ratio is.判断题1.Because of the multiple tools at its disposal, the Fed can control the money supply veryprecisely.2.The Federal Reserve primarily uses open-market operations to change the moneysupply.3.Banks still could contribute to changes in the money, even if they were required to holdall deposits in reserve.4.When the Federal Reserve decrease the discount rate, the quantity of reserves increasesand the money supply increases.5.An increase in reserve requirements increases reserves and decreases the money supply.6.If the quantity of money supplied is greater than the quantity demanded, then pricesshould fall.7.According to the Fisher effect, if inflation rises then the nominal interest rate rises.8.An increase in money demand would create a surplus of money at the original value ofmoney.9.For a given level of money and real GDP, and increase in velocity would lead to anincrease in the price level.10.If inflation is higher than expected, then borrowers makes nominal interest paymentsthat are less than they expected.CBBADC DBCCCA FTFTT FTFTF。
货币银行学教材
货币、银行与金融市场学(The Economics Of Money, Banking andFinancial Markets)教材：学生用书：《货币金融学》(The Economics Of Money, Banking and Financial Markets)，[美] Frederic S. Mishkin/著，中国人民大学出版社，2006年第七版。
教师用书：“The Economics Of Money, Banking and Financial Markets”，7th Edition. Frederic S. Mishkin, 2005.阅读书目：1．《西欧金融史》，[美]P. 金德尔伯格/著，中国金融出版社，1991年。
(“A Financial History of Western Europe”, Charles P. Kinderberger.)2．《货币史—从公元800年起》，[英]约翰. F. 乔恩/著，商务印书馆，2002年。
(“A HISTORY OF MONEY—From AD 800”, John F. Chown, 1994.)3．《国际金融市场》第四版，[英]斯蒂芬. 瓦尔迪兹朱利安. 伍德/著，中国金融出版社，2005年。
(“An Introduction to Global Financial Market”, 4th Edition, by Stephen Valdez, 2003.)4．“Lombard Street: A Description of The Money Market”, by Walter Bagehot.5．《货币银行学》，黄达/编，中国人民大学出版社。
6．《货币银行学》，夏德仁李念斋/编，中国金融出版社。
Part 1 导言(Introduction)Chapter 1 为什么要研究货币、银行和金融市场? (Why study Money, Banking, and FinancialMarket)?一.为什么要研究金融市场(Why study Financial Market)？Part 2 of this book focuses on financial market, market in which funds are transferred from people who have an excess of available funds to people who a shortage. Financial market such as stock market and bond market are important in channeling funds from people who do not have a productive use for them to those who do, a process that results in greater economic efficiency. Activities in financial market also have direct effects on personal wealth, the behavior of businesses and consumers, and the overall performance of the economy.（一）债券市场(The Band Market and Interest Rates)A security (also called a financial instrument) is a claim on the issuer’s future income or assets (any financial claim or piece of property that is subject to ownership). A bond is a debts security that promises to make payments periodically for a specified period of time. The bond market is especially important to economic activities and because it enable corporations or governments to borrow to financetheir activities and because it is where interest rates are determined. An interest rate is the cost of borrowing or the price paid for the rental of funds. There are many interest rates in the economy—mortgage interest rate, car loan rate, and interest rates on many different types of bonds.Because different interest rates have a tendency to move in unison, economists frequently lump interest rates together and refer to “the” interest rate.（二）股票市场(The Stock Market)A stock represents a share of ownership in a corporation. It is a security that is a claim on the earnings and assets of the corporation. Issuing stock and selling it to the public is a way for corporations to raise funds to finance their activities. The stock market, in which claims on the earnings of corporations (shares of stock) are traded, is the most widely followed financial market in America (that’s why it is often called simply “the market”). A big swing in the prices of shares in the stock market is always a big story on the evening news. People often express their opinion on where the market is heading and frequently tell you about their latest “big killing”(although you seldom hear about their latest “big loss”!). The attention the market receives can probably be best explained by one simple fact: It is a place where people can get rich quickly.The stock market is also an important factor in business investment decisions because the price of shares affects the amount of funds that can be raised by selling newly issued stock to finance investment spending. A higher price for a firm’s shares m eans that is it can raise a large amount of funds, which can be used to buy production facilities and equipment.（三）外汇市场(The Foreign Exchange Market) For funds to be transferred from one country to another, they have to be converted from one currency in the country of origin (say, renminbi) into the currency of the country they are going to (say, U.S. dollars). The foreign exchange market is where this conversion takes place, and so it is instrumental in moving funds between countries. It is also important because it is where the foreign exchange rate, the price of one country’s currency in terms of another’s, is determined.What have these fluctuations in the exchange rate meant to the Chinese public and businesses?二．为什么要研究银行和金融机构(Why study Banking and Financial Institutions)？（一）金融体系结构(Structure of the Financial System)The financial system is complex, comprising many different types of private sector financial institutions, including banks, insurance companies,mutual funds, financial companies, and investment banks, all of which are heavily regulated by the government. If an individual wanted to make a loan to IBM or GM, for example, they would not go directly to the president of the company and offer a loan. Instead, they would lend to such companies in directly through financial intermediaries, institutions that borrow funds from people who have saved and in turn make loan to others.Why are financial intermediaries so crucial to well-functioning financial markets? Why do they extend credit to one party but not to another? Why do they usually write complicated legal documents when they extend loans? Why are they the most heavily regulated businesses in the economy?（二）银行以及其他金融机构(Banks and Other Financial Institutions)银行（banks）是接受存款和提供贷款的金融机构。
多恩布什《宏观经济学》第十版英文原版I19revised
CHAPTER 19BIG EVENTS: THE ECONOMICS OF DEPRESSION,HYPERINFLATION, AND DEFICITSChapter Outline•The Great Depression and its impact on macroeconomics•Money and inflation•Monetarism and the rational expectations approach•The effects of hyperinflation•Disinflation and the sacrifice ratio•Credibility•The Fed's dilemma•Deficits, money growth, and seigniorage•The inflation tax•Federal government outlays and revenues•The primary deficit•The debt-to-income ratio•The burden of the debt•Financing Social SecurityChanges from the Previous EditionThe material in this chapter was in Chapter 18 in the previous edition. It has been updated, Boxes 19-2 and 19-5 have been added, and other boxes have been renumbered accordingly. Introduction to the MaterialThe Great Depression in the 1930s presented an economic crisis of enormous proportions. Between 1929 and 1933, real GDP in the U.S. fell by almost 30% and unemployment reached an all-time high of almost 25%. While the economy grew fairly rapidly from 1933-37, unemployment remained in the double digit range. In 1937/38, there was another major recession and the unemployment rate remained above 5% until 1942. In the 1930s unemployment averaged 18.8%, but by 1939 real GDP had recovered to its 1929 level.The classical economists of the time were not equipped to explain the existence of such substantial and persistent unemployment or to prescribe policies to deal with it. Only in 1936, in John Maynard Keynes’book The General Theory of Employment, Interest and Money, was a macroeconomic theory introduced upon which policies to keep the economy out of future recessions could be based. Keynes’ theory provided an explanation of what had happened during the Great Depression and suggested policies that might have prevented it.The stock market crash of 1929 is often seen as the catalyst for the Great Depression but, in fact, economic activity actually started to decline even before the crash. What might well have393been an average recession turned into a very severe depression due to the inept economic policies employed at the time. The Fed failed to provide needed liquidity to banks and did little to prevent the collapse of the financial system. The huge contraction in money supply due to the large numbers of bank failures caused the economic downturn. Fiscal policy was weak at best. Politicians concerned with balancing the budget raised taxes to match increases in government spending, so the decline in aggregate demand was not counteracted.Many other countries also suffered during the same period, mainly as a result of the collapse of the international financial system and the enactment of high tariffs worldwide. These policies were designed to protect domestic producers in an attempt to improve each country’s domestic trade balance at the expense of foreign trading partners. However, the attempts to "export" unemployment ultimately resulted in an overall decline in world trade and production.In the U.S., many institutional changes and administrative actions, collectively known as the New Deal, were implemented in the 1930s. The Fed was reorganized and new institutions were created, including the FDIC, the SEC, and the Social Security Administration. Public works programs and a program to establish orderly competition among firms were also implemented.The experience of the Great Depression led to the belief that the economy is inherently unstable and active stabilization policy is needed to maintain full employment. Keynes was an advocate of active government policy. In his work, he explained what had happened in the Great Depression and what could be done to avoid a recurrence. Many years later, Milton Friedman and Anna Schwartz offered a different explanation. In their book A Monetary History of the United States, Friedman and Schwartz argued that the severe decline in money supply, caused by the Fed’s failure to prevent banks from failing, was the reason for the severity of the Great Depression. They claimed that monetary policy is very powerful and that fluctuations in money supply can explain most of the fluctuations in GDP over the last century. This argument provided the impetus for new research on the effects of fiscal and monetary stabilization policies. While economists are still debating these issues, we can conclude that monetary policy can affect the behavior of output in the short and medium run, but not in the long run. In the long run, increases in the growth rate of money supply will simply lead to increases in the rate of inflation. Box 19-3 gives an overview of the monetarist positions on the importance of money for the economy, while Box 19-2 quotes Fed Chairman Ben Bernanke, who admits that the magnitude of the Great Depression was indeed the result of the Fed’s action—or, more accurately, inaction.The link between inflation and monetary growth can easily be derived from the quantity theory of money equation:MV = PY ==> %∆M + %∆V = %∆P + %∆Y ==> m + v = π + y ==> π = m - y + v In other words, the rate of inflation (%∆P = π) is determined by the difference between the growth rate of nominal money supply (%∆M = m) and the growth rate of real output (%∆Y = y), adjusted for the percentage change in the income velocity of money (%∆V = v).Figure 19-1 shows that trends in the rate of inflation and the growth of money supply (M2) have been somewhat similar over the last four decades. There is plenty of evidence to support the notion that in the long run, inflation is a monetary phenomenon here in the U.S. as well as in other countries. However, there are short-run variations, indicating that changes in velocity and output growth have also affected the inflation rate. By the mid 1990s, the relationship between394M2 growth and inflation had largely broken down, even for the long run. It is still true, however, that there has never been inflation in the long run without rapid growth of money supply, and the faster money grew the higher the rate of inflation.Although there is no exact definition, countries are said to experience hyperinflation when the inflation rate reaches 1,000% annually. Countries that have experienced hyperinflation have all had huge budget deficits which, in many cases, originated from increased government spending during wartime. A classical example is the German hyperinflation of 1922/23. In an economy experiencing hyperinflation, there is often widespread indexing, most likely to foreign exchange rates rather than to the price level, since prices are changing so fast. Eventually, hyperinflation becomes too much to bear and the government is forced to take harsh measures, including fiscal reform and the introduction of a new monetary unit pegging the new money to a foreign currency. Box 19-4 on the situation in Bolivia in the 1980s provides a good example of how hyperinflation can be stopped. It also points out that the costs are great in terms of decreasing per-capita income. In 1985, Bolivia stopped external debt service, raised taxes, reduced money creation, and stabilized the exchange rate. Inflation came down quickly, but per-capita income in 1989 was 35 percent less than it had been a decade earlier.In its fight against hyperinflation, Israel tried to keep unemployment rates low by instituting wage and price controls while also sharply cutting budget deficits and rationing credit. These measures reduced the rate of inflation significantly. In the late 1980s, the governments of Argentina and Brazil imposed wage-price controls but failed to supplement them with fiscal austerity, so the result was much less satisfactory, although they, like many South American countries eventually succeeded in lowering their inflation rates. In the early 1990s, countries in Eastern Europe experienced brief periods of high inflation during their adjustments from centrally planned economies to more market based economies (as shown in Table 19-6). There is no guarantee that periods of hyperinflation will not surface again. New Box 19-5 describes the situation in Zimbabwe where the decision made in 2006 to print more money to finance higher government spending led to inflation rates in excess of 1,000%.When inflation is high, policy makers must focus on reducing it without causing a major economic downturn. This is fairly difficult to accomplish, however, since labor contracts tend to reflect past expectations and new contract negotiations take time. In addition, it may be difficult for a central bank to gain credibility in its fight against inflation because of its behavior in the past. Credibility is important, since inflationary expectations adjust down faster if people believe that a government is serious in its attempt to reduce inflation. If this is the case, the expectations-adjusted Phillips curve shifts to the left sooner and the economy adjusts more quickly to the full-employment level of output at a lower inflation rate. But some increase in unemployment is almost always needed to reduce inflation, since real wages need to adjust down to their full-employment level. The costs to society are often measured in terms of the sacrifice ratio, that is, the ratio of the cumulative percentage loss of GDP to the achieved reduction in the inflation rate.Probably all economists now agree with the monetarist propositions that rapid money growth tends to be inflationary and inflation cannot be kept low unless money growth is kept low. We also know that monetary policy has long and variable lags. But other monetarist positions remain more controversial, including those that suggest that the economy is inherently stable and that monetary targets are better than interest rate targets. The rational expectations approach can be seen as an extension of the monetarist approach, with a strong belief that markets clear rapidly395and people use all information available to them. This is why they advocate policy rules rather than discretion and place emphasis on the credibility of policy makers. Box 19-6 highlights the rational expectations approach.Any government that is unwilling to show fiscal restraint will ultimately be faced with excessive money growth and an increase in the inflation rate. Continued large government budget deficits create a policy dilemma for a central bank, which must decide whether to monetize the debt. If the central bank decides not to finance the debt, the increased borrowing needs of the government may drive interest rates up, leading to the crowding out of private spending. The central bank may then be blamed for slowing down economic growth. But if the central bank is worried about high interest rates and monetizes the debt in order to keep interest rates low, inflation may increase with the central bank taking the blame.The financing of government spending through the creation of high-powered money is an alternative to explicit taxation. Inflation acts like a tax since the government can spend more by printing money while people can spend less, since some of their income must be used to increase their nominal money holdings. The inflation tax revenue is defined as:inflation tax revenue = (inflation rate)*(the real money base).The ability of the government to raise additional tax revenue through the creation of money (and therefore inflation) is called seigniorage, and Table 19-7 shows some empirical evidence of the inflation tax revenue raised as percentage of GDP for some Latin American countries. However, there is a limit to how much revenue a government can raise through an inflation tax. As inflation increases, people reduce their currency holdings and banks reduce their excess reserves, since holding money becomes more costly. Eventually the real monetary base falls so much that the government's inflation tax revenue decreases. Figure 19-3 shows this graphically.While higher deficits can cause higher inflation if they are financed through money creation, higher inflation may also contribute to deficits, since inflation reduces the real value of tax payments. In addition, high nominal interest rates (caused by high inflation) raise the nominal interest payments the government must make on the national debt. The inflation-adjusted deficit corrects for that and is defined in the following way:inflation-adjusted deficit = total deficit - (inflation rate)*(national debt).Large government budget deficits and rapid monetary expansion seem to be inevitable parts of hyperinflation. The high rate of monetary expansion originates in the government's desire to raise its inflation tax revenue. However, the government can only be successful if it prints money faster than the public anticipates. Eventually, the process will break down, as the real money base becomes smaller and smaller.During the 1980s, the U.S. experienced very large budget deficits, which were temporarily brought under control in the late 1990s, only to increase sharply again in 2002. Figure 19-4 shows the trend in U.S. budget deficits as percentage of GDP, while Tables 19-8 and 19-9 give an overview of trends in the U.S. government's outlays and revenues. It is interesting to note that entitlements and interest payments on the national debt have increased significantly over the last396four decades. On the revenue side, corporate income taxes as a share of GDP have declined, while social insurance taxes have increased substantially.To highlight the role of the national debt in the budget, it is useful to distinguish between the actual budget deficit and the primary (non-interest) budget deficit. The U.S. budget deficits in the 1990s were actually more a result of high interest payments on the previously incurred debt than of government spending exceeding tax revenues. This is the legacy of past deficits. As the national debt accumulates, its interest costs accelerate, contributing even more to the budget deficit. The national debt is the result of all past and present budget deficits, and the process by which the Treasury finances the debt is called debt management. As old government securities mature, the Treasury issues new securities to make the payments on old ones.Robert Eisner has argued that it is important to recognize that the government has assets and not just debts. Any spending on infrastructure should be treated as accumulation of real capital and offset by the debt issued to pay for it. In other words, just like private spending, government expenditures should be separated into government “consumption” and government “investment.”With the U.S. gross national debt now exceeding $8.5 trillion (or over $28,000 per capita), it becomes important to consider its real burden. If individuals who hold government bonds consider an increase in government debt as an increase in their personal wealth, they will consume more and a lower share of GDP will be invested. This will lead to a lower rate of capital accumulation and slower future economic growth. Another concern is that foreigners hold a large part of the debt. Since the burden of future tax payments on this part of the debt (plus interest) will fall on U.S. taxpayers while the recipients of these payments will be foreigners, there will be a reduction in U.S. net wealth.High deficits cannot be sustained indefinitely, but as long as national income is growing faster than the national debt (implying a declining debt-income ratio), the potential for instability is fairly low. In the 1990s, there was widespread sentiment that government had grown too big and that sound fiscal policy had to be implemented. The fiscal restriction finally succeeded in turning the large budget deficits of the 1980s into budget surpluses in 1998. A debate quickly began among politicians about the best ways to put the surplus to use. Was it better to cut taxes, increase spending, or gradually pay off the national debt? The path chosen by the Bush administration was a massive tax cut, leading to renewed budget deficits in 2002.Another debate revolves around Social Security reform. There is increasing concern about the financial difficulties that the Social Security system will face in the near future. The system is financed to a large extent on a pay-as-you-go basis, with most of the earmarked taxes paid by current workers being used immediately to finance the Social Security benefits of current retirees. Such a transfer of resources from the young to the old can be accomplished if:• A growing population increases the ratio of workers to retirees. If population growth slows, however, then contributions have to be increased or benefits have to be cut.•High-income growth allows retirement benefits to be higher than past contributions, since the source of the benefits is the higher income of the younger generations. If income growth slows, however, then the system may face financing difficulties.•The political situation is favorable. A larger percentage of older people than younger people vote so the elderly can enforce the intergenerational transfer through the political system. But at some point, the young, who expect to receive lower benefits than their parents relative to their contributions, may refuse to support the system through their taxes.397While the Social Security system is often seen as a “forced savings system,” which makes sure that everyone accumulates some wealth for retirement, there is strong empirical evidence that the system actually reduces national saving due to its pay-as-you-go financing. The decline in saving reduces the rate of capital accumulation, which lowers productivity and future living standards.The Social Security trust fund actually has been growing as a result of the Social Security Reform of 1983, but current predictions are that the system will be bankrupt after 2045 when most of the baby-boomer generation will have retired. While most people do not wish to see the Social Security system totally abandoned, additional reforms are very likely in the near future. The central question is how to earn higher returns on the funds invested to prevent the system from insolvency and how to preserve equity for those who have already paid into the system. Suggestions for LecturingStudents who follow the news see stock prices fluctuate daily and they probably heard about past stock market bubbles and crashes. These students will be curious about the impact of major swings in stock market activity on the economy. Most people assume that the stock market crash of October, 1929 marked the beginning of the Great Depression and are not aware that economic activity had actually begun to decline earlier. A good way to introduce the material in this chapter is to ask: “Could a Great Depression happen again?” or “Do stock market crashes cause economic downturns?” Either will lead to a lively class discussion that can help to highlight several of the issues raised in the chapter. In this discussion the major stock market crash of October, 1987 and the decline in (especially high-tech) stock values that started in March, 2000 will undoubtedly come up. They are reminders that stock market bubbles will always eventually burst and that there is considerable risk associated with buying stocks.Most economists now agree that the magnitude of the Great Depression was exacerbated by inadequate fiscal and monetary policy responses. The Fed’s failure to inject e nough liquidity into the banking system to prevent failures led to a severe contraction in the supply of money and an economic downturn, and. Policy makers also did little initially to stimulate economic activity through fiscal policy. The severity of the economic situation in the 1930’s is not surprising to economists today, as no well-developed economic theory existed at the time that could deal with a disturbance of this magnitude. It was not until John Maynard Keynes offered an explanation of what had happened during the Great Depression and suggested ways to prevent future recessions that macroeconomists began to ponder the values of fiscal and monetary stabilization policies. It is no wonder that Keynes is seen by many as the “father of all macroeconomists.”Economic theories are generally pro ducts of their time and, as mentioned above, Keynes’macroeconomic theory was developed as a result of the Great Depression. His explanation and prescription for preventing future depressions were widely accepted, but did not have much impact on policy making in the U.S. until the 1960s, when the government followed (mostly fiscal) activist policies to ensure full employment.The handling of the major stock market crash of 1987 appears to indicate that policy makers have learned from past mistakes. Stock values dropped by more than 24% in October of 1987, but we did we not see a severe downturn in economic activity. Why not? For one, Alan398Greenspan, who had been appointed as chair of the Board of Governors of the Fed only a few months earlier, was conscious of what had happened in 1929 and immediately assured financial markets that the Fed would provide the liquidity needed to prevent a financial collapse. The Fed quickly started to undertake open market purchases in an effort to drive interest rates down. In addition, as a result of institutional changes implemented after the Great Depression, government now has a much larger role in the economy. Students should be aware that the Great Depression not only shaped modern macroeconomic thinking and approaches to stabilization policy, but also shaped the structure of many U.S. institutions. Instructors may want to spend some time talking about these institutions and their importance to our economy.It also should be noted that the economy was in much better shape when the stock market crashed in 1987 than it was in 1929. While we can only speculate on what would have happened had the economy been in worse shape, the existence of programs such as Social Security and unemployment insurance would have dampened the severity of a downturn by providing some automatic stability. In addition, the existence of the FDIC, which insures all bank deposits up to $100,000, now serves to avoid panic in financial markets and runs on banks.The recession in 1981/82, which was the most severe recession since the Great Depression and brought the unemployment level close to 11%, provides another good example that policy makers now react much more swiftly to major economic upheavals. Even though the recession was fairly severe, it did not last for an extended period, since expansionary policies were implemented almost immediately after the magnitude of the downturn became clear.There are still disagreements about the primary causes for the Great Depression and these should be clarified. The Keynesian explanation concentrates on spending behavior, that is, the reduction in consumption and the collapse of investment. The decrease in aggregate demand was exacerbated by the restrictive fiscal policy implemented by the government trying to balance the budget. The monetarist explanation concentrates on the behavior of money and asserts that the Fed failed to prevent the collapse of the banking system. The large number of bank failures led to a loss of confidence in the banking system, an enormous increase in the currency-deposit ratio, and therefore a huge decrease in the money multiplier. Monetarists see the resulting severe decline in money supply as the cause of the Great Depression. Both explanations fit the facts and it is important for instructors to point out that there is no inherent conflict between them; in fact, they complement one another.While the programs of the New Deal are largely credited with revitalizing the economy in the mid-1930s, probably one of the most important factors was the sharp increase in money supply, starting in 1933. This is often a forgotten fact. It should be noted that while unemployment remained high, the deflation of prices and wages stopped after 1933, and output began to rebound. In addition, some of the programs implemented by the government after the Great Depression helped to keep wages from falling further.The fact that unemployment’s downward pressure on wages tends to weaken if high unemployment is persistent should also be mentioned at this point. The possibility that the behavior of nominal wages affects the rate of inflation should be discussed with reference to the situation in some European countries, where the unemployment rate has been above the levels experienced in the U.S. for quite some time.The German hyperinflation of 1922-23, when the inflation rate averaged 322% per month, provides another example of a major economic event that shaped macroeconomic thinking. But399students will probably prefer to discuss more recent examples, such as the Bolivian experience of the 1980s highlighted in Box 19-4 or the situation in Zimbabwe starting in 2006. Both cases make clear that the cost of stopping hyperinflation can be extremely high in terms of a decreased standard of living. The discussion should make it clear that large budget deficits and rapid monetary growth are always prevalent in times of hyperinflation, and only draconian measures can ensure a reduction in inflationary expectations. Without such measures the economy will collapse and has to be completely restructured, with the introduction of a new monetary unit that may be pegged to a foreign exchange rate.There is no exact definition of hyperinflation, but it is said to exist when the inflation rate reaches 1,000% on an annual basis. Students will always remember the following definition of inflation in general: “inflation is nothing more than too much money chasing too few goods.” But is inflation “always and everywhere a monetary phenomenon,” as Milton Friedman put it? Figure 19-1 indicates that the rate of inflation and the growth rate of M2 show somewhat similar long-run trends (at least until about 1993), but there are large variations in the short run. In other words, the link between monetary growth and the inflation rate is by no means precise. For one, growth in output affects the inflation rate and real money holdings. Interest rate changes and financial innovations also affect desired money holdings and therefore the income velocity of money. Empirical evidence indicates that the velocity of M2 has shown a fairly constant long-run trend from the 1960s to the 1990s, while the velocity of M1 has fluctuated significantly over the last few decades. Considering the enormous changes that took place in the U.S. banking system in the 1980s, it is surprising that the income velocity of M2 actually stayed as stable as it did. By the late 1990s, the link between M2 growth and the inflation rate had largely broken down; the possible causes and any monetary policy implications should be discussed.By now, students should be familiar with the quantity theory of money equation and should be able to derive the equation that shows the long-run relationship between money growth, output growth, velocity changes, and the rate of inflation. We can thus derive the following:MV = PY ==> %∆M + %∆V = %∆P + %∆Y ==> %∆P = %∆M - %∆Y + %∆V==> π = m - y + v.This equation indicates that higher growth rates of money (%∆M = m) adjusted for growth in output (%∆Y = y) and changes in velocity (%∆V = v) are associated with higher inflation rates (%∆P = π). The strict monetary growth rule is based on this equation and suggests that a zero inflation rate can be achieved if money supply is only allowed to grow at the same rate as the long-run trend of output, assuming that velocity remains stable. It should be made clear, that this equation shows only a long-run relationship and that output growth and velocity can be highly variable in the short run, causing great variations in the inflation rate.Besides looking at the role of monetary growth in determining the inflation rate, instructors may also want to spend some time looking at the role of nominal wages and labor productivity. Just by recalling the simple equationw = W/P,400。
米什金《货币金融学-英文第12版》PPT-第一章 为什么研究货币、银行和金融市场
FinanceChapter1 IntroductionWhy Study Money, Banking, and Financial Markets An Overview of the Financial SystemWhat Is Money?Lecture 1Why Study Money, Banking, and Financial Markets?•Course Overview•Why Study Financial Markets?•Why Study Financial Institutions and Banking?•Why Study Money and Monetary Policy?Learning Objectives：How to construct a preliminary financial knowledge system Types of financial marketsTypes of financial institutionsHow the central bank implement monetary policyWhat is monetary theoryPart 1Why Study Financial Markets?1.1 Financial MarketsFinancial Markets (P2)：Markets in which funds are transferred from people who have an excess of available funds to people who have a shortage.金融市场：资金从那些可用资金过剩的人转移到资金短缺的人的市场。
Why study financial markets?•Channel funds from savers to borrowers, thereby promoting economic efficiency•Affect personal wealth and behavior of business firms1.2 The Bond Market and Interest RatesBond (P3) is a debt security that promises to make periodic payments for a specified period of time.债券：是一种债务性证券，承诺在一个特定时间段内定期支付。
曼昆《经济学原理》（宏观）第五版测试题库（30）
曼昆《经济学原理》（宏观）第五版测试题库（30）Chapter 30Money Growth and InflationTRUE/FALSE1. The inflation rate is measured as the percentage change in a price index.ANS: T DIF: 1 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: InflationKEY: MSC: Definitional2. U.S. prices rose at an average annual rate of about 4 percent over the last 70 years.ANS: T DIF: 1 REF: 30-0NAT: Analytic LOC: The role of money TOP: InflationMSC: Analytical3. The United States has never had deflation.ANS: F DIF: 1 REF: 30-0NAT: Analytic LOC: The role of money TOP: DeflationMSC: Definitional4. In the 1990s, U.S. prices rose at about the same rate as in the 1970s.ANS: F DIF: 1 REF: 30-0NAT: Analytic LOC: The role of money TOP: U.S. inflationMSC: Definitional5. As the price level falls, the value of money falls.ANS: F DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Value | MoneyMSC: Interpretive6. The price level is determined by the supply of, and demand for, money.ANS: T DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Money marketMSC: Definitional7. If the quantity of money supplied is greater than the quantity demanded, then prices should fall.ANS: F DIF: 2 REF: 30-1NAT: Analytic LOC: The role of money TOP: Money marketMSC: Analytical8. Dollar prices and relative prices are both nominal variables.ANS: F DIF: 1 REF: 30-1NAT: Analytic LOC: The role of moneyTOP: Nominal variables | Real variables MSC: Definitional9. The quantity equation is M x V = P x Y.ANS: T DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Quantity equationMSC: Definitional10. According to the Fisher effect, if inflation rises then the nominal interest rate rises.ANS: T DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Fisher effectMSC: Definitional11. An increase in money demand would create a surplus of money at the original value of money.ANS: F DIF: 2 REF: 30-1NAT: Analytic LOC: The role of money TOP: Money marketMSC: Applicative201412. Hyperinflations are associated with governments printing money to finance expenditures.ANS: T DIF: 1 REF: 30-1NAT: Analytic LOC: Unemployment and inflation TOP: HyperinflationMSC: Definitional13. For a given level of money and real GDP, an increase in velocity would lead to an increase in the price level. ANS: T DIF: 2 REF: 30-1NAT: Analytic LOC: The role of money TOP: Velocity of moneyMSC: Analytical14. The quantity theory of money can explain hyperinflations but not moderate i nflation.ANS: F DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: HyperinflationMSC: Interpretive15. If P represents the price of goods and services measured in money, then 1/P is the value of money measured interms of goods and services.ANS: T DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Money | ValueMSC: Interpretive16. When the value of money is on the vertical axis, an increase in the price level shifts money demand to theright.ANS: F DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Money demandMSC: Applicative17. The money supply curve shifts to the left when the Fed buys government bonds.ANS: F DIF: 2 REF: 30-1NAT: Analytic LOC: The role of money TOP: Money supplyMSC: Analytical18. When the value of money is on the vertical axis, the money supply curve slopes upward because an increase in the value of money induces banks to create more money.ANS: F DIF: 2 REF: 30-1NAT: Analytic LOC: The role of money TOP: Money supplyMSC: Definitional19. If the Fed increases the money supply, the equilibrium value of money decreases and the equilibrium price level increases.ANS: T DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Money marketMSC: Analytical20. A rising price level eliminates an excess supply of money.ANS: T DIF: 2 REF: 30-1NAT: Analytic LOC: The role of money TOP: Money marketMSC: Analytical21. A rising value of money eliminates an excess supply of money.ANS: F DIF: 2 REF: 30-1NAT: Analytic LOC: The role of money TOP: Money marketMSC: Analytical22. Nominal GDP measures output of final goods and services in physical terms.ANS: F DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Nominal variablesMSC: Interpretive2016 Chapter 30 /Money Growth and Inflation23. The classical dichotomy is useful for analyzing the economy because in the long run nominal variables are heavily influenced by developments in the monetary system, and real variables are not.ANS: T DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Classical dichotomyMSC: Definitional24. The irrelevance of monetary changes for real variables is called monetary neutrality. Most economists accept monetary neutrality as a good description of the economy in the long run, but not the short run.ANS: T DIF: 2 REF: 30-1NAT: Analytic LOC: The role of money TOP: Monetary neutralityMSC: Interpretive25. The quantity theory of money implies that if output and velocity are constant, then a 50 percent increase in themoney supply would lead to less than a 50 percent increase in the price level.ANS: F DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Quantity theoryMSC: Applicative26. The source of all four classic hyperinflations was high rates of money growth.ANS: T DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: HyperinflationMSC: Definitional27. In the long run, an increase in the growth rate of the money supply leads to an increase in the real interest rate,but no change in the nominal interest rate.ANS: F DIF: 1 REF: 30-1NAT: Analytic LOC: The role of money TOP: Quantity theoryMSC: Definitional28. Inflation induces people to spend more resources maintaining lower money holdings. The costs of doing thisare called shoeleather costs.ANS: T DIF: 1 REF: 30-2NAT: Analytic LOC: The role of money TOP: Shoeleather costs of inflation MSC: Definitional29. Shoeleather costs and menu costs are both costs of anticipated inflation.ANS: T DIF: 1 REF: 30-2NAT: Analytic LOC: Unemployment and inflationTOP: Shoeleather costs of inflation | Menu costs o f inflation MSC: Definitional30. For a given real interest rate, an increase in the inflation rate reduces the after-tax real interest rate.ANS: T DIF: 2 REF: 30-2NAT: Analytic LOC: Unemployment and inflation TOP:Inflation | Taxes | Real interest rate MSC: Analytical31. Inflation necessarily distorts saving when either real interest income or nominal interest income is taxed. ANS: F DIF: 2 REF: 30-2NAT: Analytic LOC: The role of money TOP: Inflation | Real interest rate MSC: Interpretive32. Inflation distorts savings when real interest income, rather than nominal interest income, is taxed.ANS: F DIF: 2 REF: 30-2NAT: Analytic LOC: The role of money TOP: Inflation | Real interest rate MSC: Interpretive33. Suppose the nominal interest rate is 10 percent; the tax rate on interest income is 28 percent, and the inflationrate is 6 percent. Then the after-tax real interest rate is -3.2 percent.ANS: F DIF: 2 REF: 30-2NAT: Analytic LOC: The role of money TOP: Taxes | Real interest rateMSC: Interpretive34. Suppose the nominal interest rate is 5 percent; the tax rate on interest income is 30 percent, and the after-taxreal interest rate is 0.8 percent. Then the inflation rate is 2.7 percent.ANS: T DIF: 2 REF: 30-2NAT: Analytic LOC: The role of money TOP: Taxes | Real interest rate MSC: Interpretive35. If the Fed were to unexpectedly increase the money supply, creditors would gain at the expense of debtors. ANS: F DIF: 1 REF: 30-2NAT: Analytic LOC: The role of moneyTOP: Wealth redistribution | Inflation MSC: Applicative36. If inflation is higher than expected, then borrowers make nominal interest payments that are less than theyexpected.ANS: F DIF: 2 REF: 30-2NAT: Analytic LOC: Unemployment and inflation TOP: Menu costs of inflationMSC: Applicative37. Inflation is costly only if it is unanticipated.ANS: F DIF: 1 REF: 30-2NAT: Analytic LOC: Unemployment and inflation TOP: Inflation costsMSC: Interpretive38. Even though monetary policy is neutral in the short run, it may have profound real effects in the long run. ANS: F DIF: 1 REF: 30-3NAT: Analytic LOC: The role of money TOP: Monetary neutralityMSC: InterpretiveSHORT ANSWER1. Why did farmers in the late 1800s dislike deflation?ANS:Most had large nominal debts. The decrease in the price level meant that they received less for what they produced and so made it harder to pay off the debts whose real value rose as prices fell.DIF: 2 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Deflation MSC: Analytical2. Explain the adjustment process in the money market that creates a change in the price level when the moneysupply increases.ANS:When the money supply increases, there is an excess supply of money at the original value of money. After the money supply increases, people have more money than they want to hold in their purses, wallets and checking accounts. They use this excess money to buy goods and services or lend it out to other people to buy goods and services. The increase in expenditures causes prices to rise and the value of money to fall. As the value of money falls, the quantity of money people want to hold increases so that the excess supply is eliminated. At the end of this process the money market is in equilibrium at a higher price level and a lower value of money.DIF: 2 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Money marketMSC: Analytical2018 Chapter 30 /Money Growth and Inflation3. Suppose the Fed sells government bonds. Use a graph of the money market to show what this does to the valueof money.ANS:When the Fed sells government bonds, the money supply decreases. This shifts the money supply curve from MS1 to MS2 and makes the value of money increase. Since money is worth more, it takes less to buy goods with it, which means the price level falls.DIF: 2 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Money marketMSC: Analytical4. Using separate graphs, demonstrate what happens to the money supply, money demand, the value of money,and the price level if:a. the Fed increases the money supply.b. people decide to demand less money at each value of money.ANS:a. The Fed increases the money supply. When the Fed increases the money supply, the money supply curveshifts right from MS1 to MS2. This shift causes the value of money to fall, so the price level rises.b. People decide to demand less money at each value of money. Since people want to hold less at eachvalue of money, it follows that the money demand curve will shift to the left from MD1 to MD2. Thedecrease in money demand results in a lower value of money and so a higher price level.DIF: 2 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Money marketMSC: Analytical5. According to the classical dichotomy, what changes nominal variables? What changes real variables? ANS:The classical dichotomy argues that nominal variables are determined primarily by developments in the monetary system such as changes in money demand and supply. Real variables are largely independent of the monetary system and are determined by productivity and real changes in the factor and loanable funds markets.DIF: 1 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Classical dichotomyMSC: Definitional6. Suppose that monetary neutrality holds. Of the following variables, which ones do not change when themoney supply increases?a. real interest ratesb. inflationc. the price leveld. real outpute. real wagesf. nominal wagesANS:a. real interest ratesd. real outpute. real wagesDIF: 1 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Monetary neutralityMSC: Interpretive7. Wages and prices are many times higher today than they were 30 years ago, yet people do not work a lot morehours or buy fewer goods. How can this be?ANS:Inflation has raised the general price level. An increase in the general price level has no effect on real variables in the long run. Wages are higher, but so are prices. Prices are higher, but so are wages and incomes. In the long run, people change their behavior in response to changes in real variables, not nominal ones.DIF: 2 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Nominal variables | Real variablesMSC: Interpretive8. Identify each of the following as nominal or real variables.a. the physical output of goods and servicesb. the overall price levelc. the dollar price of applesd. the price of apples relative to the price of orangese. the unemployment ratef. the amount that shows up on your paycheck after taxesg. the amount of goods you can purchase with the wage you get each hourh. the taxes that you pay the governmentANS:a. real variableb. nominal variablec. nominal variabled. real variablee. real variablef. nominal variableg. real variableh. nominal variableDIF: 1 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Nominal variables | Real variablesMSC: Interpretive2020 Chapter 30 /Money Growth and Inflation9. Define each of the symbols and explain the meaning o f M V = P Y.ANS:M is the quantity of money, V is the velocity of money, P is the price level, and Y is the quantity of o utput. P Y is nominal GDP. The amount people spend should equal the amount of money in the economy times the average number of times each unit of currency is spent.DIF: 1 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Velocity MSC: Definitional10. What assumptions are necessary to argue that the quantity equation implies that increases in the money supplylead to proportional changes in the price level?ANS:We must suppose that V is relatively constant and that changes in the money supply have no effect on real output. DIF: 2 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Quantity theoryMSC: Definitional11. What is the inflation tax, and how might it explain the creation of inflation by a central bank?ANS:The inflation tax refers to the fact that inflation is a tax on money. When prices rise, the value of money currently held is reduced. Hence, when a government raises revenue by printing money, it obtains resources from households by taxing their money holdings through inflation rather than by sending them a tax bill. In countries where governments are unable or unwilling to raise revenues by raising taxes explicitly, the inflation tax may be an alternative source of revenue.DIF: 1 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Inflation tax MSC: Interpretive12. Economists agree that increases in the money-supply growth rate increase inflation and that inflation isundesirable. So why have there been hyperinflations and how have they been ended?ANS:Typically, the government in countries that had hyperinflation started with high spending, inadequate tax revenue, and limited ability to borrow. Therefore, they turned to the printing presses to pay their bills. Massive and continued increases in the quantity of money led to hyperinflation, which ended when the governments instituted fiscal reforms eliminating the need for the inflation tax and subsequently slowed money supply growth.DIF: 2 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: HyperinflationMSC: Interpretive13. Suppose that velocity and output are constant and that the quantity theory and the Fisher effect both hold.What happens to inflation, real interest rates, and nominal interest rates when the money supply growth rate increases from 5 percent to 10 percent?ANS:Inflation and nominal interest rates each increase by 5 percent points. There is no change in the real interest rate or any other real variable.DIF: 1 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Inflation MSC: Analytical14. In recent years Venezuela and Russia have had much higher nominal interest rates than the United Stateswhile Japan has had lower nominal interest rates. What would you predict is true about money growth in these other countries? Why?ANS:The Fisher effect says that increases in the inflation rate lead to one-to-one increases in nominal interest rates. The quantity theory says that in the long run, inflation increases one-to-one with money supply growth. It follows that differences in nominal interest rates may be due to differences in money supply growth rates. It is reasonable to guess that much higher nominal interest rates in Venezuela and Russia indicate higher money supply growth while lower interest rates in Japan indicate lower money supply growth.DIF: 1 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Fisher effect MSC: Applicative15. The U.S. Treasury Department issues inflation-indexed bonds. What are inflation-indexed bonds and why arethey important?ANS:Inflation-indexed bonds are bonds whose interest and principal payments are adjusted upward for inflation, guaranteeing their real purchasing power in the future. They are important because they provide a safe, inflation- proof asset for savers and they may allow the Treasury to borrow more easily at a lower current cost.DIF: 1 REF: 30-1 NAT: AnalyticLOC: The role of money TOP: Index bonds MSC: Definitional16. List and define any two of the costs of high inflation.ANS:The costs include:Shoeleather costs: the resources wasted when inflation induces people to reduce their money holdings.Menu costs: the cost of more frequent price changes at higher inflation rates.Relative Price Variability: because prices change infrequently, higher inflation causes relative prices to vary more. Decisions based on relative prices are then distorted so that resources may not be allocated efficiently.Inflation Induced Tax Distortions: the income tax is not completely indexed for inflation; an increase in nominal income created by inflation results in higher real tax rates that discourage savings.Confusion and Inconvenience: inflation decreases the reliability of the unit of account making it more complicated to differentiate successful and unsuccessful firms thereby impeding the efficient allocation of funds to alternative investments.Unexpected Inflation: inflation decreases the real value of debt thereby transferring wealth from creditors to debtors. DIF: 1 REF: 30-2 NAT: AnalyticLOC: The role of money TOP: Inflation costsMSC: Definitional17. Inflation distorts relative prices. What does this mean and why does it impose a cost on society?ANS:Relative prices are the value of one good in terms of other goods. Relative prices ordinarily provide signals concerning therelative scarcity of goods so the goods may be allocated efficiently. Some prices change infrequently, so that when inflation rises, there is greater variation in relative prices. However, changes in relative prices created by inflation do not signal changes in the scarcity of goods and so lead to an inefficient allocation of goods and resources.DIF: 1 REF: 30-2 NAT: AnalyticLOC: The role of money TOP: Relative price variabilityMSC: Interpretive18. Explain how inflation affects savings.ANS:Inflation discourages savings. Income tax is collected on nominal rather than real interest rates. So an increase in inflation will increase nominal interest rates and taxes. The increase in taxes in turn lowers the real return on savings and so discourages savings.DIF: 1 REF: 30-2 NAT: AnalyticLOC: The role of money TOP: Saving | InflationMSC: Applicative2022 Chapter 30 /Money Growth and Inflation19. The U.S. Treasury Department began issuing inflation-indexed bonds in early 1997. Since these assets arevirtually risk free, both in terms of default risk and inflation risk, will they quickly replace all other kinds of assets that still entail risk of one kind or another, such as ordinary government bonds or corporate bonds?Explain.ANS:When individuals are choosing between assets of different kinds, they consider both expected return and risk. Because the new inflation-indexed bonds have very low risk, they will also have very low real interest rates. So they will not replace other, more risky assets that promise to pay a much higher real interest rate. They do, however, offer a way of escaping some inflation risk, and have become a popular addition to portfolios.DIF: 1 REF: 30-2 NAT: AnalyticLOC: The role of money TOP: Index bonds MSC: AnalyticalSec00 - Money Growth and InflationMULTIPLE CHOICE1. Over the past 70 years, prices in the U.S. have risen on average abouta. 2 percent per year.b. 4 percent per year.c. 6 percent per year.d. 8 percent per year.ANS: B DIF: 1 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: Inflation rateMSC: Definitional2. Over the past 70 years, the overall price level in the U.S. has experienced a(n)a. 4-fold increase.b. 8-fold increase.c. 12-fold increase.d. 16-fold increase.ANS: D DIF: 1 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: Inflation rateMSC: Definitional3. Over the last 70 years, the average annual U.S. inflation rate was abouta. 2 percent, implying that prices have increased 10-fold.b. 4 percent, implying that prices have increased 10-fold.c. 2 percent, implying that prices have increased 16-fold.d. 4 percent, implying that prices increased about 16-fold.ANS: D DIF: 2 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: Inflation rateMSC: Definitional4. Inflation can be measured by thea. change in the consumer price index.b. percentage change in the consumer price index.c. percentage change in the price of a specific commodity.d. change in the price of a specific commodity.ANS: B DIF: 1 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: InflationMSC: Definitional5. Which of the following is not correct?a. The inflation rate is measured as the percentage change in a price index.b. For the last 40 or so years, U.S. inflation hasn’t shown much variation from its average rate of about 2 percent.c. During the 19th century there were long periods of falling prices.d. Some economists argue that the costs of moderate inflation are not nearly as large as the general public believes.ANS: B DIF: 2 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: InflationMSC: Interpretive6. In which of the following cases was the inflation rate 10 percent over the last year?a. One year ago the price index had a value of 110 and now it has a value of 120.b. One year ago the price index had a value of 120 and now it has a value of 132.c. One year ago the price index had a value of 126 and now it has a value of 140.d. One year ago the price index had a value of 145 and now it has a value of 163. ANS: B DIF: 2 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: Inflation rateMSC: Applicative7. If the price level increased from 120 to 126, then what was the inflation rate?a. 3 percentb. 5 percentc. 6 percentd. None of the above is correct.ANS: B DIF: 1 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: Inflation rateMSC: Applicative8. If the price level increased from 120 to 150, then what was the inflation rate?a. 30 percentb. 25 percentc. 20 percentd. None of the above is correct.ANS: B DIF: 1 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: Inflation rateMSC: Applicative9. When prices are falling, economists say that there isa. disinflation.b. deflation.c. a contraction.d. an inverted inflation.ANS: B DIF: 1 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: DeflationMSC: Definitional10. Deflationa. increases incomes and enhances the ability of debtors to pay off their debts.b. increases incomes and reduces the ability of debtors to pay off their debts.c. decreases incomes and enhances the ability of debtors to pay off their debts.d. decreases incomes and reduces the ability of debtors to pay off their debts. ANS: D DIF: 2 REF: 30-0NAT: Analytic LOC: Unemployment and inflation TOP: DeflationMSC: Interpretive。
货币金融学,米什金
• A share of stock is a claim on the earnings and assets of the corporation
一股股票代表了对于公司的资产和收益所具有的求偿权
FIGURE 2 Stock Prices as Measured by the Dow Jones Industrial Average, 1950–2008 图2 1950～2008年以道琼斯工业平均指
• The foreign exchange rate is the price of one currency in terms of another currency 外汇汇率是指一个国家货币对于另一个国家货
币的价格
• The foreign exchange market determines the foreign exchange rate
20世纪80年代以前，货币供应量的增长和美国长期国债利 率之间存在着密切的联系
• Since then, the relationship is less clear but the rate of money growth is still an important determinant of interest rates
• A continual rise in the price level (inflation) affects all economic players
物价总水平的持续上升（通货膨胀）将会对于所有经济主体 产生影响
• Data shows a connection between the money supply and the price level 有关数据
100个经济学术语
100个经济学术语1.货币政策-- Money Policy2.货币流动-- Currency Flows3.金融政策-- Financial Policy4.货币供应-- Money Supply5.通货膨胀-- Inflation6.购买力平价-- Purchasing Power Parity7.储蓄率-- Savings Rate8.经济增长-- Economic Growth9.投资-- Investment10.消费-- Consumption11.汇率-- Exchange Rate12.零售销售-- Retail Sales13.贸易赤字-- Trade Deficit14.贸易贡献-- Trade Surplus15.外汇结构-- Foreign Exchange Structure16.累积赤字-- Accumulated Deficit17.优惠政策-- Subsidy Policy18.货币市场-- Money Market19.社会保障-- Social Security20.社会风险-- Social Risk21.财政税收-- Fiscal Taxation22.银行业监管-- Banking Supervision23.国际收支-- Balance of International Payments24.国际贸易-- International Trade25.负债-- Debt26.投机-- Speculation27.货币贬值-- Currency Devaluation28.汇率监管-- Exchange Rate Control29.汇率波动-- Exchange Rate Fluctuations30.量化宽松-- Quantitative Easing31.财政补贴-- Fiscal Subsidies32.机会成本-- Opportunity Cost33.市场价格-- Market Pricing34.资金流动-- Fund Flows35.效用-- Utility36.经济因素-- Economic Factors37.消费者支出-- Consumer Expenditures38.收入分配-- Income Distribution39.关税-- Tariffs40.经济政策-- Economic Policy41.欧盟-- European Union42.可支配收入-- Disposable Income43.经济学模型-- Economic Models44.利率-- Interest Rate45.技术创新-- Technological Innovation46.信用-- Credit47.经济结构-- Economic Structure48.现金流量-- Cash Flow49.竞争-- Competition50.财政支出-- Fiscal Expenditure51.金融改革-- Financial Reform52.非货币政策-- Non-monetary Policy53.贷款-- Loans54.市场需求-- Market Demand55.需求分析-- Demand Analysis56.汇率-- Exchange Rate57.负债率-- Debt to Equity Ratio58.波动性-- Volatility59.消费者保价-- Consumer Price Index60.货币开支-- Monetary Expenditures61.物价指数-- Price Index62.调整-- Adjustment63.预算不平衡-- Budget Imbalance64.全球经济-- Global Economy65.投资风险-- Investment Risk66.汇率风险-- Exchange Rate Risk67.财政失衡-- Fiscal Imbalance68.碳排放税-- Carbon Tax69.补贴-- Subsidy70.储备货币-- Reserve Currency71.零利率政策-- Zero Interest Policy72.泡沫经济-- Bubble Economy73.货币结构-- Monetary Structure74.国际衡平-- International Equilibrium75.社会运动-- Social Movements76.商业循环-- Business Cycle77.物价水平-- Price Level78.生产力-- Productivity79.竞争环境-- Competitive Environment80.间接税-- Indirect Taxes81.舶来税-- Tariff82.社会失业-- Social Unemployment83.进出口-- Imports and Exports84.金融冲击-- Financial Shocks85.国际准备金-- International Reserves86.秩序市场-- Orderly Market87.贸易协议-- Trade Agreements88.受抑制-- Restrained89.补充货币-- Supplementary Currency90.竞争力-- Competitiveness91.外汇储备-- Exchange Reserves92.贷款利率-- Loan Interest Rate93.效率市场-- Efficiency Market94.通货紧缩-- Deflation95.分布公平-- Distribution Fairness96.报酬均等-- Equal Remuneration97.投资回报-- Return on Investment98.投资效率-- Investment Efficiency99.可支配收入差距-- Disposable Income Gap 100.投资回流-- Investment Reflow。
宏观经济学术语(中英文对照)
MEASUREING A NATION'S INCOME一国收入的衡量Microeconomics the study of how households and firms make decisions and how they interact in markets。
微观经济学:研究家庭和企业如何做出决策，以及他们如何在市场上相互交易. Macroeconomics the study of economy-wide phenomena,including inflation，unemployment,and economic growth宏观经济学：研究整体经济现象，包括通货膨胀、失业和经济增长。
GDP is the market value of final goods and services produced within a country in a given period of time.国内生产总值GDP：给定时期的一个经济体内生产的所有最终产品和服务的市场价值Consumption is spending by households on goods and services，with the exception of purchased of new housing。
消费：除了购买新住房，家庭用于物品与劳务的支出。
Investment is spending on capital equipment inventories, and structures，including household purchases of new housing.投资:用于资本设备、存货和建筑物的支出,包括家庭用于购买新住房的支出。
Government purchases are spending on goods and services by local，state，and federal government.政府支出：地方、州和联邦政府用于物品和与劳务的支出。
Ch28 Inflation(经济学,英文版-复旦,周翼)
persistent inflation must be accompanied by continuing money growth
28.9
The Phillips curve
Prof. A W Phillips demonstrated a statistical relationship between annual inflation and unemployment in the UK The Phillips curve shows that a higher inflation rate is accompanied by a lower unemployment rate. Inflation rate (%)
People have inflation illusion when they confuse nominal and real changes. People’s welfare depends upon real variables, not nominal variables. If all nominal variables (prices and incomes) increase at the same rate, real income does not change.
What are the causes of inflation? What can be done about it?
28.2
Inflation in the UK, 1950-99
30 25 20
% p.a.
15 10 5 0
19 50 19 70 19 90
Source: Economic Trends Annual Supplement, Labour Market Trends 28.3
学术英语(社科)Unit2二单元原文及翻译
UNIT 2 Economist1.Every field of study has its own language and its own way of thinking. Mathematicians talk about axioms, integrals, and vector spaces. Psychologists talk about ego, id, and cognitive dissonance. Lawyers talk about venue, torts, and promissory estoppel.每个研究领域都有它自己的语言和思考方式。
数学家谈论定理、积分以及向量空间。
心理学家谈论自我、本能、以及认知的不一致性。
律师谈论犯罪地点、侵权行为以及约定的禁止翻供。
2.Economics is no different. Supply, demand, elasticity, comparative advantage, consumer surplus, deadweight loss—these terms are part of the economist’s language. In the coming chapters, you will encounter many new terms and some familiar words that economists use in specialized ways. At first, this new language may seem needlessly arcane. But, as you will see, its value lies in its ability to provide you a new and useful way of thinking about the world in which you live.经济学家也一样。
宏观经济学名词解释
GDP is the market value of final goods and services produced within a country in a given period of time. Consumption is spending by households n goods and services, with the exception of purchased of new housing. Investment is spending on capital equipment inventories, and structures, including household purchases of new housing.Government purchases are spending on goods and services by local, state, ad federal government.Net export is spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)Nominal GDP is the production of goods and services valued at current prices. Real GDP is the production of goods and services valued at constant prices. GDP deflator is a measure of the price level calculated as the ratio of nominal GDP to real GDP times 100.CPI is measure of the overall cost of the goods and services bought by a typical consumer. I nflation rate is the percentage change in the price index from the preceding period. Producer price index (PPI) is a measure of the cost of a basket of goods and services bought by firms.Nominal interest rate is the interest rate as usually reported without a correction of the effects of inflation.Real interest rate is the interest rate corrected for the effects of inflation.Productivity is the amount of goods and services produced from each hour of a worker’s time.Physical capital is the stock of equipment and structures that are used to produce goods and services.Human capital is the knowledge and skills that workers acquire through education, training, and experience.Natural resources are the inputs into the production of goods and services that are provided by nature. Technological knowledge is society’s understanding of the bes ways to produce goods and services. Diminishing returns are the property whereby the benefit from an extra unit of an input declines as the quantity of the input increases.Catch-up effect is the property whereby continues that start off poor tend to grow more rapidly than countries that start off rich.Financial system is the group of institutions in the economy that help to match one person’s saving with another person’s investment.Financial markets are financial institutions through which savers can directly provide funds to borrowers.Bond is a certificate of indebtednessStock is a claim to partial ownership in a firmFinancial intermediarie s are financial institutions through which savers can indirectly provide funds to borrowers. Mutual fund is an institution that sells shares to the public and uses the proceeds to buy a portion of stocks and bonds.第十五章 MEASUREING A NATION’S INCOME一国收入的衡量Microeconomics the study of how households and firms make decisions and how they interact in markets.微观经济学：研究家庭和企业如何做出决策，以及他们如何在市场上相互交易。
曼昆中级宏观经济学(英文) (10)
7
Discussion Question
Which of these are money?
a. Currency b. Deposits in checking accounts (called demand deposits) c. Credit cards* d. Certificates of deposit (called time deposits, Saving account) e. Debit cards
9
The central bank
l Monetary policy is conducted by a country’s central bank. l In the U.S., the central bank is called the Federal Reserve (“the Fed”).
6
Money: types
1. fiat money 法定货币
has no intrinsic value
没有内在价值 example: the paper currency we use
2. commodity money 商品货币
has intrinsic value
有内在价值 examples: gold coins,
The Federal Reserve Building Washington, DC
10
_Symbol Assets included Amount(billions)_2008 Money supply measures, April 2002 C Currency $794 M1 C + demand deposits, travelers’ checks, other checkable deposits 1465
货币政策如何运作英语作文
货币政策如何运作英语作文Monetary Policy and How It Works。
Monetary policy plays a crucial role in the functioning of an economy. It is a set of actions taken by the central bank to control the money supply, interest rates, and inflation in order to achieve macroeconomic objectives. In this article, we will explore how monetary policy operates and its impact on the economy.The central bank, often referred to as the monetary authority, is responsible for formulating and implementing monetary policy. In most countries, the central bank operates independently from the government to ensure the stability of the financial system and to avoid political interference.One of the primary tools of monetary policy is open market operations. The central bank buys or sells government securities in the open market to influence the money supply. When the central bank buys government securities, it injects money into the economy, increasing the money supply. Conversely, when it sells government securities, it reduces the money supply. By controlling the money supply, the central bank can influence interest rates and economic activity.Another important tool is the reserve requirement. The central bank sets a certain percentage of deposits that commercial banks must hold as reserves. By increasing or decreasing this requirement, the central bank can affect the amount of money that banks can lend. When the reserve requirement is increased, banks have less money to lend, which reduces the money supply and slows down economic activity. Conversely, when the reserve requirement is decreased, banks have more money to lend, stimulating economic growth.Interest rates are a key component of monetary policy. The central bank can directly control short-term interest rates through its lending and deposit facilities. By raising or lowering these rates, the central bank can influence borrowing costs for commercial banks and ultimately for businesses and individuals. When interest rates are lowered,borrowing becomes cheaper, encouraging investment and consumption. On the other hand, when interest rates are raised, borrowing becomes more expensive, discouraging spending and investment.Inflation targeting is another important aspect of monetary policy. Central banks aim to achieve a specific inflation target, typically around 2%. By adjusting interest rates and the money supply, the central bank can influence inflation levels. When inflation is too high, the central bank may raise interest rates to reduce spending and curb inflationary pressures. Conversely, when inflation is too low, the central bank may lower interest rates to stimulate economic activity and increase inflation.Monetary policy also has international implications. Changes in interest rates and the money supply can affect exchange rates, which in turn impact the competitiveness of a country's exports and imports. For example, if a central bank raises interest rates, it may attract foreign investors seeking higher returns on their investments, leading to an appreciation of the domestic currency. This can make exports more expensive and imports cheaper, potentially affecting trade balances.In conclusion, monetary policy is a powerful tool used by central banks to manage the economy. Through open market operations, reserve requirements, interest rate adjustments, and inflation targeting, the central bank can influence the money supply, interest rates, and inflation levels. These actions have a significant impact on economic activity, investment, and international trade. It is crucial for policymakers to carefully assess the economic conditions and make informed decisions to ensure stable and sustainable economic growth.。
曼昆 宏观经济学教案Ecn101_lecture14
CHAPTER 4Money and Inflationslide 1From last time …CHAPTER 4Money and Inflationslide 2The downward -sloping AD curveAn increase in the price level causes a fall in real money balances (M /P ),causing adecrease in the demand for goods & services.Y P ADCHAPTER 4Money and Inflationslide 3Shifting the AD curveAn increase in the money supply shifts the AD curve to the right.YPAD 1AD 2CHAPTER 4Money and Inflationslide 4The long -run aggregate supply curveYPLRASYThe LRAS curve is vertical at the full-employment level of output.CHAPTER 4Money and Inflationslide 5Long -run effects of an increase in MYPAD 1AD 2LRASYAn increase in M shifts the AD curve to the right.P 1P 2In the long run, this increases the price level……but leaves output the same.CHAPTER 4Money and Inflationslide 6The short run aggregate supply curveYPPSRASThe SRAS curve is horizontal:The price level is fixed at a predetermined level, and firms sell as much as buyers demand.CHAPTER 4Money and Inflationslide 7Short -run effects of an increase in MYPAD 1AD 2…an increase in aggregate demand…In the short run when prices are sticky,……causes output to rise.PSRAS Y 2Y 1CHAPTER 4Money and Inflationslide 8The SR & LR effects of ∆M > 0YPAD 1AD 2LRASYPSRAS P 2Y 2A = initialequilibrium ABCB = new short-run eq’m after Fed increases MC = long-runequilibriumCHAPTER 4Money and Inflationslide 9Continuing from where we ended lasttime …CHAPTER 9Introduction to Economic Fluctuationsslide 10Shocksshocks : exogenous changes in aggregatesupply or demandShocks temporarily push the economy awayfrom full-employment.An example of a demand shock:exogenous decrease in velocityIf the money supply is held constant, then a decrease in V means people will be using theirmoney in fewer transactions, causing a decrease in demand for goods and services:CHAPTER 9Introduction to Economic Fluctuationsslide 11LRASAD 2PSRAS The effects of a negative demand shockYPAD 1YP 2Y 2The shock shifts AD left, causing output andemployment to fall in the short run A B COver time, prices fall and theeconomy moves down its demand curve toward full-employment.CHAPTER 9Introduction to Economic Fluctuationsslide 12Supply shocksA supply shock alters production costs, affects the prices that firms charge. (also called price shocks )Examples of adverse supply shocks:Bad weather reduces crop yields, pushing up food prices.Workers unionize, negotiate wage increases. New environmental regulations require firms to reduce emissions. Firms charge higher prices to help cover the costs of compliance. (Favorable supply shocks lower costs and prices.)CHAPTER 9Introduction to Economic Fluctuationsslide 13CASE STUDY:The 1970s oil shocksEarly 1970s: OPEC coordinates a reductionin the supply of oil.Oil prices rose11% in 197368% in 197416% in 1975Such sharp oil price increases are supplyshocks because they significantly impact production costs and prices.CHAPTER 9Introduction to Economic Fluctuationsslide 141PSRAS 1YP ADLRASYY 2The oil price shock shifts SRAS up, causing output and employment to fall. BIn absence of further priceshocks, prices will fall over time and economy moves back toward full employment.2P SRAS 2CASE STUDY:The 1970s oil shocksACHAPTER 9Introduction to Economic Fluctuationsslide 15Stabilization policydef: policy actions aimed at reducing the severity of short-run economic fluctuations. Example: Using monetary policy tocombat the effects of adverse supply shocks:CHAPTER 9Introduction to Economic Fluctuationsslide 16Stabilizing output with monetary policy1P SRAS 1Y PAD 1B2P SRAS 2AY 2LRASYThe adverse supply shock moves the economy to point B.CHAPTER 9Introduction to Economic Fluctuationsslide 17Stabilizing output with monetary policy1P YPAD 1B2P SRAS 2AC Y 2LRASYAD 2But the Fed accommodates the shock by raising agg. demand.results:P is permanently higher, but Yremains at its full-employment level.CHAPTER 9Introduction to Economic Fluctuationsslide 18More on stabilization policy latermacroeconomics fifth editionN. Gregory MankiwPowerPoint ®Slidesby Ron CronovichCHAPTER TENAggregate Demand Im a c r o© 2003 Worth Publishers, all rights reservedCHAPTER 10Aggregate Demand Islide 20Where are we?Chapter 9 introduced the model of aggregate demand and aggregate supply.Long run–prices flexible–output determined by factors of production & technology–unemployment equals its natural rate Short run–prices fixed–output determined by aggregate demand –unemployment is negatively related to outputCHAPTER 10Aggregate Demand Islide 21Where are we?This chapter develops the IS-LM model, a full blown theory that yields the aggregate demand curve.We focus on the short run and assume the price level is fixed.This chapter (and chapter 11) focus on the closed-economy case. Chapter 12 presents the open-economy case.CHAPTER 10Aggregate Demand Islide 22The Keynesian CrossA simple closed economy model in whichincome is determined by expenditure. (due to J.M. Keynes)This is a historical model. We use it to build up theIS curve (to be defined later)CHAPTER 10Aggregate Demand Islide 23The Keynesian CrossBack for a moment to CH. 3:Y = C + I + GIntroduce new piece of notation:E = C + I + G = planned expenditureY = real GDP = actual expenditureWe want to emphasize now that actual and planned expendituremay be different in the short run.Difference between actual & planned expenditure: unplanned inventories (firms stock up more units of goods they intended toif sales are less than expected, or they deplete their “normal” level of inventories should there be higher than expected demand).CHAPTER 10Aggregate Demand Islide 24Elements of the Keynesian Cross=−=−()()C C Y T MPC Y T I I=,G G T T===−++()E MPC Y T I G Actual expenditure Planned expenditureY E==consumption function:for now, investment isexogenous:planned expenditure:Equilibrium condition:govt policy variables:CHAPTER 10Aggregate Demand Islide 25Graphing planned expenditureincome, output,YEplanned expenditureE =C +I +GMPC⋅I +G -MPC T=−++()E MPC Y T I GCHAPTER 10Aggregate Demand Islide 26Graphing the equilibrium conditionincome, output,YEplannedexpenditureE =Y 45ºCHAPTER 10Aggregate Demand Islide 27The equilibrium value of incomeincome, output,YEplanned expenditureE =YE =C +I +GEquilibrium incomeCHAPTER 10Aggregate Demand Islide 28Equilibrium in the Keynesian crossmodelThe equilibrium as defined in this modelcorresponds to the equilibrium level of output that we defined and determined in chapter 3, only seen in a different way here.The main difference is that here we focuson the short term, during which output can move away from its full employment equilibrium level (up or down).CHAPTER 10Aggregate Demand Islide 29Example: An increase in governmentpurchasesYEE =YE =C +I +G 1E 1= Y 1E =C +I +G 2E 2= Y 2∆YAt Y 1,there is now an unplanned drop in inventory……so firmsincrease output, and income rises toward a new equilibrium∆GCHAPTER 10Aggregate Demand Islide 30Solving for ∆Y=⋅−++()Y MPC Y T I G−=−⋅++1()Y MPC MPC T I G ()∆=−⋅∆+∆+∆−11()Y MPC T I G MPC ()=−⋅++−11()Y MPC T I G MPC 11MPC Y G⎛⎞∆=×∆⎜⎟−⎝⎠equilibrium conditionRemember, T and I did not change.CHAPTER 10Aggregate Demand Islide 31The government purchases multiplierExample: If MPC = 0.8, thenDefinition: the increase in income resultingfrom a $1 increase in G .In this model, the govt purchases multiplier equals 11MPC Y G ∆=∆−1510.8Y G ∆==∆−An increase in Gcauses income to increase by 5 timesas much!CHAPTER 10Aggregate Demand Islide 32Why the multiplier is greater than 1Initially, the increase in G causes an equalincrease in Y :∆Y = ∆G . But ↑Y ⇒↑C⇒further ↑Y ⇒further ↑C ⇒further ↑YSo the final impact on income is muchbigger than the initial ∆G .CHAPTER 10Aggregate Demand Islide 34An increase in taxesYEE=YE =C 2+I +GE 2= Y 2E =C 1+I +G E 1= Y 1∆YAt Y 1, there is now an unplannedinventory buildup……so firms reduce output, and income falls toward a new equilibrium∆C = −MPC ∆TInitially, the tax increase reduces consumption, and therefore E :CHAPTER 10Aggregate Demand Islide 35Solving for ∆YY C I G∆=∆+∆+∆()MPC Y T=×∆−∆C=∆(1MPC)MPC Y T−×∆=−×∆eq’m condition in changesI and G exogenousSolving for ∆Y :MPC 1MPC Y T ⎛⎞−∆=×∆⎜⎟−⎝⎠Final result:CHAPTER 10Aggregate Demand Islide 36The Tax Multiplierdef: the change in income resulting from a $1 increase in T :MPC 1MPCY T∆−=∆−0808410802....Y T∆−−===−∆−If MPC = 0.8, then the tax multiplier equalsCHAPTER 10Aggregate Demand Islide 37The Tax Multiplier…is negative :A tax hike reduces consumer spending, which reduces income.…is greater than one (in absolute value ): A change in taxes has a multiplier effect on income.…is smaller than the govt spending multiplier :Consumers save the fraction (1-MPC) of a tax cut, so the initial boost in spending from a tax cut is smaller than from an equal increase in G .CHAPTER 10Aggregate Demand Islide 38The IS -LM modelUntil now, the model is overly simple.The components of expenditure are allexogenous…Now let’s go back and reintroduce theinterest rate, r, in the demand for investment function:I = I (r)CHAPTER 10Aggregate Demand Islide 39Y 2Y 1Effect of a decrease in r↓r ⇒↑IYEE =C +I (r 1)+GE =C +I (r 2)+GE =Y ∆I⇒↑E ⇒↑YThe IS curvedef: a graph of all combinations of r and Y that result in goods market equilibrium,Deriving the IS curveEE =Y E =C +I (r )+G 2i.e. actual expenditure (output)= planned expenditure The equation for the IS curve is:↓r ⇒ ↑I ⇒ ↑E ⇒ ↑Y∆Ir r1 r2E =C +I (r1 )+GY1Y2YY = C ( − T ) + I (r ) + G YIS Y1 Y2Yslide 41CHAPTER 10Aggregate Demand Islide 40CHAPTER 10Aggregate Demand IWhy the IS curve is negatively slopedA fall in the interest rate motivates firms to increase investment spending, which drives up total planned spending (E ). To restore equilibrium in the goods market, output (a.k.a. actual expenditure, Y ) must increase.Fiscal Policy and the IS curveWe can use the IS-LM model to see how fiscal policy (G and T ) can affect aggregate demand and output. Let’s start by using the Keynesian Cross to see how fiscal policy shifts the IS curve…CHAPTER 10Aggregate Demand Islide 42CHAPTER 10Aggregate Demand Islide 4311Shifting the IS curve: ∆GAt any value of r, ↑G ⇒ ↑E ⇒ ↑Y …so the IS curve shifts to the right. The horizontal distance of the IS shift equals 1 ∆Y = ∆G 1 − MPCEE =Y E =C +I (r )+G 1 2E =C +I (r1 )+G1Question is: is the new level of equilibrium output, Y2 really attainable? Will interest rates really stay constant at r1? Introduce now the theory of liquidity preference.A simple theory in which the interest rate is determined by money supply and money demand.CHAPTER 10r r1Y1Y2Y∆YIS1Y1CHAPTER 10Y2IS2 Yslide 44Aggregate Demand IAggregate Demand Islide 45The Theory of Liquidity PreferenceRecall from ch. 4. People choose how to allocate their income between liquid assets (money) and interest-bearing illiquid assets depending on the level of the interest rate. If interest rates go up, they will want to hold less money and more assets such as savings accounts, stocks, bonds, etc.Money SupplyThe supply of real money balances is fixed:rinterest rate(MP)s(MP) =M PsM PM/Preal money balancesslide 47CHAPTER 10Aggregate Demand Islide 46CHAPTER 10Aggregate Demand I12Money DemandDemand for real money balances:rinterest rateEquilibriumP)s(M(MP)d= L (r ,Y )The interest rate adjusts to equate the supply and demand for money:rinterest rate(MP)sL (r ,Y )M PM P = L (r ,Y )r1L (r ,Y)M PM/Preal money balancesslide 48M/Preal money balancesslide 49CHAPTER 10Aggregate Demand ICHAPTER 10Aggregate Demand IThe LM curveThe LM curve is a graph of all combinations of r and Y that equate the supply and demand for real money balances. The equation for the LM curve is:rDeriving the LM curve(a) The market forreal money balances(b) The LM curver LMr2 r1M1 Pr2 L (r , Y2 ) L (r , Y1 )M/PAggregate Demand IM P = L (r ,Y )r1 Y1 Y2YCHAPTER 10Aggregate Demand Islide 50CHAPTER 10slide 5113Why the LM curve is upward-sloping upwardAn increase in income raises money demand. Since the supply of real balances is fixed, there is now excess demand in the money market at the initial interest rate. The interest rate must rise to restore equilibrium in the money market.rHow ∆M shifts the LM curve(a) The market forreal money balances(b) The LM curverLM2 LM1r2 r1M2 P M1 Pr2 L (r , Y1 )M/Pr1 Y1YCHAPTER 10Aggregate Demand Islide 52CHAPTER 10Aggregate Demand Islide 53How the Fed raises the interest raterinterest rateCASE STUDYVolcker’s Monetary TighteningLate 1970s: π > 10% Oct 1979: Fed Chairman Paul Volcker announced that monetary policy would aim to reduce inflation. Aug 1979-April 1980: Fed reduces M/P 8.0%To increase r, Fed reduces Mr2 r1L (r )M2 PCHAPTER 10Jan 1983: π = 3.7%M1 PM/Preal money balancesslide 54How do you think this policy change How do you think this policy change would affect interest rates? would affect interest rates?CHAPTER 10Aggregate Demand IAggregate Demand Islide 5514Volcker’s Monetary Tightening, cont.The effects of a monetary tightening on nominal interest ratesshort run model prices prediction actual outcomeCHAPTER 10The short-run equilibrium shortThe short-run equilibrium is the combination of r and Y that simultaneously satisfies the equilibrium conditions in the goods & money markets:r LMlong run Quantity Theory, Fisher Effect(Classical)Liquidity Preference(Keynesian)sticky ∆i > 0 8/1979: i = 10.4% 4/1980: i = 15.8%Aggregate Demand Iflexible ∆i < 0 1/1983: i = 8.2%slide 56Y = C ( − T ) + I (r ) + G YIS YM P = L (r ,Y )Equilibrium interest rateCHAPTER 10Equilibrium level of incomeslide 57Aggregate Demand IChapter summary1. Keynesian CrossChapter summary3. Theory of Liquidity Preferencebasic model of income determination takes fiscal policy & investment as exogenous fiscal policy has a multiplier effect on income.2. IS curvebasic model of interest rate determination takes money supply & price level as exogenous an increase in the money supply lowers the interest rate4. LM curvecomes from Keynesian Cross when planned investment depends negatively on interest rate shows all combinations of r and Y that equate planned expenditure with actual expenditure on goods & servicesCHAPTER 10comes from Liquidity Preference Theory when money demand depends positively on income shows all combinations of r andY that equate demand for real money balances with supplyCHAPTER 10Aggregate Demand Islide 58Aggregate Demand Islide 5915Chapter summary5. IS-LM modelPreview of Chapter 11In Chapter 11, we will use the IS-LM model to analyze the impact of policies and shocks learn how the aggregate demand curve comes from IS-LM use the IS-LM and AD-AS models together to analyze the short-run and long-run effects of shocks use our models to learn about the Great DepressionCHAPTER 10Intersection of IS and LM curves shows the unique point (Y, r ) that satisfies equilibrium in both the goods and money markets.CHAPTER 10Aggregate Demand Islide 60Aggregate Demand Islide 6116。
通货膨胀与失业之间的短期权衡取舍宏观经济政策的六个争论问题PPT课件
失业与通货膨胀 Unemployment and Inflation
通胀与失业的关系这一话题吸引了过去半个世 纪最重要的一些经济学家的注意力。 The relationship between inflation and unemployment is a topic that has attracted attention of some of the most important economists of the last half-century.
(a) AD－AS模型 The Model of AD and AS
(b) 菲利普斯曲线 The Phillips Curve
Price Level
106 102
短期AS
Short-run Inflation Rate
AS
(percent per
B
高AD
year)
6
B
A
High AD
0 7,500
(unemployment is 7%)
低AD Low AD
Quantity
of Output
8,000
(unemployment
is 4%)
2
0
4
(output is
8,000)
A
菲利普斯曲线 Phillips curve
7
Unemployment
(output is Rate (percent)
7,500)
通货膨胀与失业之间的短期权衡取舍宏观经济政策的六个 争论问题
通货膨胀与失业之间的短期权衡取舍宏观经济政策的六个 争论问题
失业与通货膨胀：长期 Unemployment and Inflation: The
英文中钱的十二种表达(通用8篇)
英文中钱的十二种表达（通用8篇）例句精选：篇一He socked some money for his little wife.他为他年轻的妻子存下一些钱。
He is niggardly with his money.他对钱很吝啬。
They are filthy with money.他们有的是钱。
Was there any money over ？还有剩余的钱吗？He has a mint of money.他有大量的钱。
关于钱的英语说法篇二Money and Finance1.Profit is money you gain from selling something，which is more than the money you paid for it. Loss is money you have spent and not got back.2.Extravagant1 describes somebody who spends a lot of money. Frugal2 or economical describes somebody who is careful with money.3.A current account is a bank account from which you can take money at any time. A deposit account is a bank account which pays you interest if you leave money in it for some time (we can also use the expression savings3 account or notice account)。
4.A loan is money which you borrow to buy something. A mortgage is a special kind of loan used to buy a house over a period of time.5.To deposit money is to put money into a bank account. To withdraw money is to take money out of a bank account.6.A wage and a salary are money you receive for doing a job，but wage is usually paid daily or weekly and a salary is usually paid monthly.7.If you are broke，you have no money. It is an informal expression. If you are bankrupt，you are not able to pay back money you have borrowed. It is a very serious financial situation for somebody to be in.8.In the UK，shares are one of the many equal parts into which a companys capital is divided. People who buy them are called shareholders4. Stocks are shares which are issued by the government. Dividends5 are parts of a company;s profit shared out among the shareholders.9.Income tax is a tax on money earned as wages or salary. Excise6 duty is a tax on certain goods produced in a country，such as cigarettes or alcohol.credit somebodys bank account is to put money into the account. To debit7 somebody;s bank account is to take money out. In the UK，many people pay for bills，etc using a system called “direct debit”，where money is taken directly from their account by the company providing the goods or service.a bank is a business organization which keeps money for customers and pays it out on demand or lends them money，and a building society is more usually associated with saving money or lending people money to buy houses.12.A discount is the percentage by which a full price is reduced to a buyer by the seller. A refund8 is money paid back when，for example，returning something to a shop.13.A bargain is something bought more cheaply than usual. Something which is overpriced is too expensive. Something which is exorbitant9 costs much more than its true value.14.A worthless object is something which has no value. A priceless object is an extremely valuable object.15.If you save money，you put it to one side so that you can use it later. If you invest money，you put it into property，shares，etcso that it will increase in value.16.Inflation is a state of economy where prices and wages increase. Deflation is a reduction of economic activity.17.Income is the money you receive. Expenditure10 is the money you spend.18.If you lend money，you let someone use your money for a certain period of time. If you borrow money from someone，you take money for a time，usually paying interest钱的英文例句：篇三1、I spent lots of money on smart new outfits for work.我花大笔钱购置了上班时穿的漂亮新套装。
经济学中Inflation词义的变化及其翻译
经济学中Inflation词义的变化及其翻译白暴力;孙苏婷【摘要】In the relevant economic literature ,English word Inflation is often translated into Chinese charac‐ters"tong‐huo‐peng‐zhang"which means the expansion of the currency .Although it sounds certain rational ,it's not accurate because nowadays the meaning of it has already shifted and got rid of the relationship with monetary circulation .If it still remains the translation ,the economic theory research will be affected greatly .This article just illustrated the lexical variations and appropriate translations of it in economics .%在相关的经济学文献中，英文单词“inflation”常常被翻译为“通货膨胀”一词。
虽然有一定的合理性，但是，实际上也是不准确的；当前，“inflation”一词已经发生了词义转移，摆脱了与货币发行量的关系，再将其翻译为“通货膨胀”，就会影响经济理论的研究。
文章将说明经济学中英文单词“inflation”词义的变化与当前合适的译法。
【期刊名称】《徐州工程学院学报（社会科学版）》【年(卷),期】2015(000)006【总页数】3页(P41-43)【关键词】inflation;价格总水平上涨;通货膨胀【作者】白暴力;孙苏婷【作者单位】北京师范大学经济与工商管理学院，北京 100875;西北工业大学自动控制学院，陕西西安 710072【正文语种】中文【中图分类】F01在相关的经济学文献中，英文单词“inflation”常常被翻译为“通货膨胀”一词。
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Question Three
When the Feb sells government security in the open market, the money supply:
A. decreases because banks lose liquidity, making fewer loans. B. increases because banks lose liquidity, making more loans. C. decreases because banks gain liquidity, making fewer loans. D. increases because banks gain liquidity, making more loans
A. It can generate income while it is kept. B. It has little use other than as the medium of exchange. C. It is likely to retain its value whether it is kept or exchanged. D. It is likely to be accepted by anyone and exchanged for anything
What is Money?
Money is a financial asset that serves three functions: 1. The unit of account. 2. A store of value. 3. The medium of exchange.
What is Money?ount B. store of value C. medium of exchange D. all of the above E. non of the above.
Question Two
Subject to some legal and practical restrictions, anything may be exchanged for anything else. The distinct of advantage of money is that :
What is Money?
3. The medium of exchange. Money is the financial assets that can be used to finalize transactions. Generally accepted in payment for goods and services. Generally accepted in the repayment of debts.
A. It can generate income while it is kept. B. It has little use other than as the medium of exchange. C. It is likely to retain its value whether it is kept or exchanged. D. It is likely to be accepted by anyone and exchanged for anything
Agenda
1. What is Money 2. The Federal Reserve System 3. The Quantity Theory of Money 4. Inflation and Interest Rates 5. The Cost of Inflation
Question One
Question Four
The quantity theory of money explains how:
A. real GDP depends on money supply B. nominal GDP depends on money supply C. money supply depends on nominal GDP D. money supply depends on the price level
Question One
Money serves as :
A. unit of account B. store of value C. medium of exchange D. all of the above E. non of the above.
Question Two
Subject to some legal and practical restrictions, anything may be exchanged for anything else. The distinct of advantage of money is that :
1. The unit of account. Money is how value in the economy is measured.
It indicates the price of all goods and services in the economy.
What is Money?
2. A store of value. Money is a means of preserving purchasing power. Other assets can also serve as a store of value but not as the medium of exchange. Thus, money is the most liquid of all assets.
Question Five
Inflation:
A. is more costly when it is anticipated B. makes it more difficult to plan for the future whether it is anticipated or not C. induces distortions in the money and goods market but not the labor market D. all of the above E. none of the above