Macroeconomic Theory Chapter 5: Fiscal Policy Roles of Fiscal policy To provide automatic stabilizers to insulate the economy from shocks to AD (tax and social security). To stabilize output around eq. rate using discretionary fiscal policy (another policy).
By nivedithaForest Economics © Peter Berck 2003 Type of Site, j Many “birthdays” First is –M. h j (t,s) t is calendar time s is birthday of stand h is acres harvested D j (t-s) is volume per acre Warning: See article to get > and >= correct. Simple Forest Planning Problem cont… v(t) is cut at t
By libithaBusiness, Government, and the World Economy Investment and Saving Aggregate Demand The amount that consumers, business and Government wants to purchase. Consumption Investment Government IS/LM Model – joint determination of output and interest rates Increase in Consumption
By emilyMONETARY POLICY Federal Reserve (Central Bank) controls money supply . MONETARY POLICY The money supply can/does influence price levels Inflation occurs if the money supply increases, ceteris paribus. Deflation occurs if the money supply decreases, ceteris paribus.
By arleenModeling of Economic Series Coordinated with Interest Rate Scenarios Research Sponsored by the Casualty Actuarial Society and the Society of Actuaries Investigators: Kevin Ahlgrim, ASA, PhD, Illinois State University Steve D’Arcy, FCAS, PhD, University of Illinois
By johanaLong-run model of the economy long-run economic growth--trends grow on average at about 3% per year Short-run model recognizes that we observe lots of fluctuations around the trend Referred to as the Business Cycle Keys facts re. economic fluctuations not regular --not predictable
By Thomas11. Measuring the Cost of Living . The Cost of Living. We need all sorts of things to live These things are typically not free So, what’s the cost of living the way we actually live? That is, what’s the cost of buying the things we buy?. Why Do We Need to Know the Cost of Living?.
By PamelaLanSome more points about inflation. Comparing dollars at different points in time. Did you ever have an old timer say to you, “well, when I was a kid bread was a nickel and I had to walk up hill to school in the snow and then uphill to get home.” The nickel part is what we want here.
By ivanbrittMoney and Banking. Foreign Exchange & the International Monetary System Chapters 17, 18 Week 11. Abbreviation: FOREX Over a trillion dollars worth are traded daily. Most trading is to finance the purchase of assets (e.g., bank deposits), not goods and services.
By liam10. Foreign Exchange. The basics Long run / PPP Short run / Demand & Supply Gov’t intervention. Exchange rates (XR). Price of one countries currency in terms of another Impacts Relative prices of imports/exports Attractiveness of domestic vs. foreign assets. Two ways to quote XR.
By AudreyReal Business Cycle Theory. Theory developed by Edward Prescott and Finn Kydland (Nobel laureates 2004). Real Business Cycle Theory. This theory argues that productivity shocks to the economy are the primary cause of business cycles.
By SophiaChapter 19: Advances in Business Cycle Theory. Recent Macroeconomic Ideas. Real business cycle theory Prices are fully flexible, even in the short-run Stabilizations policy must show “real” effects New Keynesian economics Wages and prices are sticky in the short-run
By lotusLessons from the Russian Crisis of 1998 and Recovery. Brian Pinto, Evsey Gurvich and Sergei Ulatov Draft Chapter for: Managing Economic Volatility and Crises: A Practitioner’s Guide Edited by Joshua Aizenman and Brian Pinto. Related papers.
By libithaCapital Budgeting. Decide how to invest money so that its value is maximized. Capital Budgeting Process. Capital budget (investment) proposals are examined on basis of their cash outlays and resulting flow of future benefits over period of time greater than one year. .
By FaradayUnderstanding Interest Rates. Lottery Options. Option 1: you get a check today for $10,000 and one a year from now for $10,000. Option 2: pays you $2,000 today and each of the next 29 years. Lottery Options (cont).
By omerChapter 18 A Macroeconomic Theory Of the Open Economy. Supply and Demand for loanable funds and for foreign-currency exchange Equilibrium in the Open Economy How Policies and events affect an open economy. Supply and Demand for loanable funds and for foreign-currency exchange
By agnesChapter 5 The macroeconomic environment . Learning objectives. Describe the business cycle — the periodic fluctuations in output, employment and price levels that have characterised our economy
By kaelChapter 13 Saving, Investment, and the Financial System. Financial Institutions in the Canadian Economy Saving and Investment in the National Income Accounts The Market for Loanable Funds.
By radLecture 10: Interest rate and liquidity preference . Mishkin Ch 5 - part B page 111-126 . Review. Theory of asset demand interest rate bond price, negatively related move along D&S curves vs. shift of D&S curves
By jadenAggregate Expenditure. Outline Components of aggregate expenditure Planned and unplanned expenditure The consumption function Imports and GDP Equilibrium expenditure The expenditure multiplier. Components of Aggregate Expenditure.
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