This document outlines key concepts from a lecture on macroeconomic models. It introduces the IS-LM model, which describes equilibrium in the goods market (IS curve) and money markets (LM curve). The IS curve shows the relationship between interest rates, inflation, assets, output and taxes. The LM curve plots the money demand and depicts equilibrium in the money market. Bringing together the IS and LM curves allows analysis of macroeconomic equilibrium when both goods and money markets clear simultaneously.
R. Villano-Diritto della comunità all'eucaristia nel pensiero del Prof. Rat...Raimondo Villano
45. R. Villano “Riflessioni e talune implicazioni sulle strutture dell’essere cristiano nell’Introduzione al Cristianesimo di Joseph Ratzinger” - Lavoro realizzato nell’ambito del Seminario teologico di Lettura (corrispondente a 3 crediti universitari CFU/ECTS) su “Strutture dell’essere cristiano” di Joseph Ratzinger tenutosi a Città del Vaticano, presso la Cattedra Teologia del Popolo di Dio della Pontificia Università Lateranense, Aula 310, dal 13 feb al 15 mag 2013 sotto la guida del Direttore Prof. Rev. Achim BUCKENMAIER (Allievo del Prof. Joseph Ratzinger, Docente di dogmatica, Direttore della Cattedra per la Teologia del Popolo di Dio presso l’Università Lateranense, Consultore del Pontificio Consiglio per la Promozione della Nuova Evangelizzazione e della Congregazione per la dottrina della Fede) e con la collaborazione del Prof. Rev. Ludwig WEIMER (Docente di dogmatica e Vice-Direttore della Cattedra; abilitato nel 1981 alla libera docenza in teologia dogmatica dal Prof. Joseph Ratzinger a Ratisbona) - Chiron, CDD 230 VIL rif 2013, LCC BX1746-1755, pp. 82, maggio 2013;
R. Villano-Diritto della comunità all'eucaristia nel pensiero del Prof. Rat...Raimondo Villano
45. R. Villano “Riflessioni e talune implicazioni sulle strutture dell’essere cristiano nell’Introduzione al Cristianesimo di Joseph Ratzinger” - Lavoro realizzato nell’ambito del Seminario teologico di Lettura (corrispondente a 3 crediti universitari CFU/ECTS) su “Strutture dell’essere cristiano” di Joseph Ratzinger tenutosi a Città del Vaticano, presso la Cattedra Teologia del Popolo di Dio della Pontificia Università Lateranense, Aula 310, dal 13 feb al 15 mag 2013 sotto la guida del Direttore Prof. Rev. Achim BUCKENMAIER (Allievo del Prof. Joseph Ratzinger, Docente di dogmatica, Direttore della Cattedra per la Teologia del Popolo di Dio presso l’Università Lateranense, Consultore del Pontificio Consiglio per la Promozione della Nuova Evangelizzazione e della Congregazione per la dottrina della Fede) e con la collaborazione del Prof. Rev. Ludwig WEIMER (Docente di dogmatica e Vice-Direttore della Cattedra; abilitato nel 1981 alla libera docenza in teologia dogmatica dal Prof. Joseph Ratzinger a Ratisbona) - Chiron, CDD 230 VIL rif 2013, LCC BX1746-1755, pp. 82, maggio 2013;
Raimondo Villano - Giornata rotariana della famigliaRaimondo Villano
Abs da: 1. R. Villano “Celebrazione rotariana della Giornata della Famiglia” - Atti del Convegno Rotary del 3 febbraio 2001 (Patrocinio R.C. Pompei, Eidos, pag. 58; Pompei, marzo 2001).
Raimondo Villano - Giornata rotariana della famigliaRaimondo Villano
Abs da: 1. R. Villano “Celebrazione rotariana della Giornata della Famiglia” - Atti del Convegno Rotary del 3 febbraio 2001 (Patrocinio R.C. Pompei, Eidos, pag. 58; Pompei, marzo 2001).
Cambridge University Press and Economic History Association a.docxShiraPrater50
Cambridge University Press and Economic History Association are collaborating with JSTOR to digitize, preserve and extend
access to The Journal of Economic History.
http://www.jstor.org
Economic History Association
The Economic Crisis of 1619 to 1623
Author(s): Charles P. Kindleberger
Source: The Journal of Economic History, Vol. 51, No. 1 (Mar., 1991), pp. 149-175
Published by: on behalf of the Cambridge University Press Economic History Association
Stable URL: http://www.jstor.org/stable/2123055
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The Economic Crisis of 1619 to 1623
CHARLES P. KINDLEBERGER
Various states in the Holy Roman Empire prepared for the Thirty Years' War by
creating new mints and debasing the subsidiary coinage. The process spread
through Gresham's Law: bad money was taken by debasing states to their
neighbors and exchanged for good. The neighbor typically defended itself by
debasing its own coin. The resulting hyperinflation was terminated early in the
war by an agreement to return to the Imperial Augsburg Ordinance of 1559. The
Kipper- und Wipperzeit, as the period is called, illuminates the geographic spread
of financial crises, German hyperinflations of this century, and current proposals
for "free banking."
INTRODUCTION
The first quarter of the seventeenth century, up to and through the
beginnings of the Thirty Years' War with the defenestration at
Prague in 1618, has been widely described as a period of crisis. The
crisis was particularly acute between 1619 and 1623; sometimes and in
particular localities it was described as a "commercial crisis," some-
times as a "joint crisis in commerce and industry," but usually as a
"currency crisis" and in one instance as a ''monetary crisis and panic"
and even "a monetary corner."' Moreover, it was set within a deeper
structural crisis covering 100 to 150 years of transition from medieval to
modern times. The period has been variously described as a movement
from feudalism to capitalism; from a feudal to a nation-state society;
from the political and economic ascendency of the South (Italy and
Spain) to that of the North (the United Provinces of Holland and
England); from a "natural economy" based on the self-sufficient
household and barter to the use of markets and money; from separate
deals to continuous trade on bourses; and from th ...
Your Optimal Precious Metals Strategy
Investing in precious metals can act as a hedge against economic turmoil. Gold has been the universal symbol of wealth for civilizations throughout the ages. Ancient cultures created gold jewelry and early forms of money were crafted from gold.
In this presentation Liiivo Leismann shares some important and critical ideas regarding precious metals and their potential as an investment.
Find out more: http:/www.inflationproofinvestor.com
Social Media as a Bridge between Teaching and ResearchStephen Kinsella
Here's a talk I gave on Tuesday to a symposium on Social Media with Prof. Gerry McKiernan, revolving around using social media tools like this blog, the text messaging software, and The Twitter, etc, to communicate and interact with my students.
A Matching Model with Friction and Multiple CriteriaStephen Kinsella
We present a model of matching based on two character measures.
There are two classes of individual. Each individual
observes a sequence of potential partners from the opposite class.
One
measure describes the "attractiveness" of an individual.
Preferences are common according to
this measure: i.e. each individual prefers highly attractive partners and all individuals
of a given class agree as to how attractive individuals of the opposite class are. Preferences are
homotypic with respect to the second measure, referred to as "character" i.e.
all individuals prefer partners of a similar character.
Such a problem may be interpreted as e.g. a job search problem in which the classes
are employer and employee, or a mate choice problem in which the classes are male and
female.
It is assumed that
attractiveness is easy to measure and observable with certainty. However,
in order to observe the character of an individual, an interview (or courtship) is required.
Hence, on observing the attractiveness of a prospective partner an individual must decide whether he/she wishes
to proceed to the interview stage. Interviews only occur by mutual consent. A pair can only be formed
after an interview. During the interview phase the prospective pair
observe each other's
character, and then decide whether they wish to form a pair.
It is assumed that mutual acceptance is required for pair formation to
occur. An individual stops searching on finding a partner.
This paper
presents a general model of such a matching process. A particular case is
considered in which character "forms a ring" and has a uniform distribution.
A set of criteria based on the concept of a subgame
perfect Nash equilibrium is used to define the solution of this particular game. It is shown that
such a solution is unique. The general form of the solution is derived and a procedure for finding
the solution of such a game is given.
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Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just what'sapp this number below. I sold about 3000 pi coins to him and he paid me immediately.
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how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the what'sapp number.
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What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the what's app number of my personal pi vendor to trade with.
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where can I find a legit pi merchant onlineDOT TECH
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Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
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BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
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Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the what'sapp contact of my personal pi merchant to trade with.
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Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
1. IS-LM & Beyond
EC6012 Lecture 2
Stephen Kinsella
Dept. Economics, University of Limerick
Stephen.Kinsella@ul.ie
February 2, 2009
2. Today
Introduction
The Model
The Output Market
Equilibrium in the product and money markets
Examples
Aggregate supply
The Phillips curve
Dynamics of asset accumulation
Expectations
3. Last Week
1815-1873, Bimetallism. Relative price ratio of gold and silver
varied only between 15:1 and 16:1
1873-1896, Price level falling everywhere. (Cross of Gold)
1914, Everyone off gold to finance war spending
1914-1924, Anchored Gold standard to dollar.
1925/26, Everyone on gold again, massive price deflation into
the 1930’s.
1936-1971, Tripartite Monetary Agreement established a new
int’l monetary system −→ dollar standard, where the dollar
was the only currency anchored to gold.
Since 1973, a flexible exchange rate regime
1985, Plaza Accord. Moves the system into a kind of
managed dollar system relative to European currencies.
Present Day: Euro, Dollar, Yen.
4. Last Week
1815-1873, Bimetallism. Relative price ratio of gold and silver
varied only between 15:1 and 16:1
1873-1896, Price level falling everywhere. (Cross of Gold)
1914, Everyone off gold to finance war spending
1914-1924, Anchored Gold standard to dollar.
1925/26, Everyone on gold again, massive price deflation into
the 1930’s.
1936-1971, Tripartite Monetary Agreement established a new
int’l monetary system −→ dollar standard, where the dollar
was the only currency anchored to gold.
Since 1973, a flexible exchange rate regime
1985, Plaza Accord. Moves the system into a kind of
managed dollar system relative to European currencies.
Present Day: Euro, Dollar, Yen.
5. Last Week
1815-1873, Bimetallism. Relative price ratio of gold and silver
varied only between 15:1 and 16:1
1873-1896, Price level falling everywhere. (Cross of Gold)
1914, Everyone off gold to finance war spending
1914-1924, Anchored Gold standard to dollar.
1925/26, Everyone on gold again, massive price deflation into
the 1930’s.
1936-1971, Tripartite Monetary Agreement established a new
int’l monetary system −→ dollar standard, where the dollar
was the only currency anchored to gold.
Since 1973, a flexible exchange rate regime
1985, Plaza Accord. Moves the system into a kind of
managed dollar system relative to European currencies.
Present Day: Euro, Dollar, Yen.
6. Last Week
1815-1873, Bimetallism. Relative price ratio of gold and silver
varied only between 15:1 and 16:1
1873-1896, Price level falling everywhere. (Cross of Gold)
1914, Everyone off gold to finance war spending
1914-1924, Anchored Gold standard to dollar.
1925/26, Everyone on gold again, massive price deflation into
the 1930’s.
1936-1971, Tripartite Monetary Agreement established a new
int’l monetary system −→ dollar standard, where the dollar
was the only currency anchored to gold.
Since 1973, a flexible exchange rate regime
1985, Plaza Accord. Moves the system into a kind of
managed dollar system relative to European currencies.
Present Day: Euro, Dollar, Yen.
7. Last Week
1815-1873, Bimetallism. Relative price ratio of gold and silver
varied only between 15:1 and 16:1
1873-1896, Price level falling everywhere. (Cross of Gold)
1914, Everyone off gold to finance war spending
1914-1924, Anchored Gold standard to dollar.
1925/26, Everyone on gold again, massive price deflation into
the 1930’s.
1936-1971, Tripartite Monetary Agreement established a new
int’l monetary system −→ dollar standard, where the dollar
was the only currency anchored to gold.
Since 1973, a flexible exchange rate regime
1985, Plaza Accord. Moves the system into a kind of
managed dollar system relative to European currencies.
Present Day: Euro, Dollar, Yen.
8. Last Week
1815-1873, Bimetallism. Relative price ratio of gold and silver
varied only between 15:1 and 16:1
1873-1896, Price level falling everywhere. (Cross of Gold)
1914, Everyone off gold to finance war spending
1914-1924, Anchored Gold standard to dollar.
1925/26, Everyone on gold again, massive price deflation into
the 1930’s.
1936-1971, Tripartite Monetary Agreement established a new
int’l monetary system −→ dollar standard, where the dollar
was the only currency anchored to gold.
Since 1973, a flexible exchange rate regime
1985, Plaza Accord. Moves the system into a kind of
managed dollar system relative to European currencies.
Present Day: Euro, Dollar, Yen.
9. Last Week
1815-1873, Bimetallism. Relative price ratio of gold and silver
varied only between 15:1 and 16:1
1873-1896, Price level falling everywhere. (Cross of Gold)
1914, Everyone off gold to finance war spending
1914-1924, Anchored Gold standard to dollar.
1925/26, Everyone on gold again, massive price deflation into
the 1930’s.
1936-1971, Tripartite Monetary Agreement established a new
int’l monetary system −→ dollar standard, where the dollar
was the only currency anchored to gold.
Since 1973, a flexible exchange rate regime
1985, Plaza Accord. Moves the system into a kind of
managed dollar system relative to European currencies.
Present Day: Euro, Dollar, Yen.
10. Last Week
1815-1873, Bimetallism. Relative price ratio of gold and silver
varied only between 15:1 and 16:1
1873-1896, Price level falling everywhere. (Cross of Gold)
1914, Everyone off gold to finance war spending
1914-1924, Anchored Gold standard to dollar.
1925/26, Everyone on gold again, massive price deflation into
the 1930’s.
1936-1971, Tripartite Monetary Agreement established a new
int’l monetary system −→ dollar standard, where the dollar
was the only currency anchored to gold.
Since 1973, a flexible exchange rate regime
1985, Plaza Accord. Moves the system into a kind of
managed dollar system relative to European currencies.
Present Day: Euro, Dollar, Yen.
11. Last Week
1815-1873, Bimetallism. Relative price ratio of gold and silver
varied only between 15:1 and 16:1
1873-1896, Price level falling everywhere. (Cross of Gold)
1914, Everyone off gold to finance war spending
1914-1924, Anchored Gold standard to dollar.
1925/26, Everyone on gold again, massive price deflation into
the 1930’s.
1936-1971, Tripartite Monetary Agreement established a new
int’l monetary system −→ dollar standard, where the dollar
was the only currency anchored to gold.
Since 1973, a flexible exchange rate regime
1985, Plaza Accord. Moves the system into a kind of
managed dollar system relative to European currencies.
Present Day: Euro, Dollar, Yen.
12. Basic Idea
IS Curve: Describes goods market equilibrium
LM Curve: Shows choice between liquid assets & illiquid
assets.
Money supply is supplied by Central Bank, assumed
exogenous.
CB chooses M/P.
Interest Rate Targeting/MS Targeting?
13. Basic Idea
IS Curve: Describes goods market equilibrium
LM Curve: Shows choice between liquid assets & illiquid
assets.
Money supply is supplied by Central Bank, assumed
exogenous.
CB chooses M/P.
Interest Rate Targeting/MS Targeting?
14. Basic Idea
IS Curve: Describes goods market equilibrium
LM Curve: Shows choice between liquid assets & illiquid
assets.
Money supply is supplied by Central Bank, assumed
exogenous.
CB chooses M/P.
Interest Rate Targeting/MS Targeting?
15. Basic Idea
IS Curve: Describes goods market equilibrium
LM Curve: Shows choice between liquid assets & illiquid
assets.
Money supply is supplied by Central Bank, assumed
exogenous.
CB chooses M/P.
Interest Rate Targeting/MS Targeting?
16. Basic Idea
IS Curve: Describes goods market equilibrium
LM Curve: Shows choice between liquid assets & illiquid
assets.
Money supply is supplied by Central Bank, assumed
exogenous.
CB chooses M/P.
Interest Rate Targeting/MS Targeting?
17. A Macro Model with Four Sectors
The product market,
The money market,
The bond market,
The labour market.
18. Setup
GDP = C + I + G , (1)
GNP = C + I + G + (X − M). (2)
GDP = C + S + T . (3)
19. Setup
GDP = C + I + G , (1)
GNP = C + I + G + (X − M). (2)
GDP = C + S + T . (3)
20. Setup
GDP = C + I + G , (1)
GNP = C + I + G + (X − M). (2)
GDP = C + S + T . (3)
21. The Output Market
Y =C +I +G (4)
(Caution)
C = C (Y ). (5)
Y = C (Y ) + ¯ + G .
I¯ (6)
22. The Output Market
Y =C +I +G (4)
(Caution)
C = C (Y ). (5)
Y = C (Y ) + ¯ + G .
I¯ (6)
23. The Output Market
Y =C +I +G (4)
(Caution)
C = C (Y ). (5)
Y = C (Y ) + ¯ + G .
I¯ (6)
24. The Output Market
Y =C +I +G (4)
(Caution)
C = C (Y ). (5)
Y = C (Y ) + ¯ + G .
I¯ (6)
25. Derivation
C = C (YD). (7)
C = C (YD, A, r ). (8)
26. Derivation
C = C (YD). (7)
C = C (YD, A, r ). (8)
31. Shifts in IS Curve
1. an increase the expected rate of inflation, or
2. a fall in the price of output, or
3. a rise in the stock of assets, or
4. an increase in the price of capital, or
5. a reduction in the level of taxes.
32. Money Markets
MD M + B + Pk K
= L Y , −π, r − π, rk , (12)
P P
BD M + B + Pk K
= J Y , −π, r − π, rk , (13)
P P
Pk K M + B + Pk K
= N Y , −π, r − π, rk , (14)
P P
M D + B D + Pk K D M + B + Pk K
= =A (15)
P P
Y
P ×R K
rk = (16)
Pk
33. Money Markets
MD M + B + Pk K
= L Y , −π, r − π, rk , (12)
P P
BD M + B + Pk K
= J Y , −π, r − π, rk , (13)
P P
Pk K M + B + Pk K
= N Y , −π, r − π, rk , (14)
P P
M D + B D + Pk K D M + B + Pk K
= =A (15)
P P
Y
P ×R K
rk = (16)
Pk
34. Money Markets
MD M + B + Pk K
= L Y , −π, r − π, rk , (12)
P P
BD M + B + Pk K
= J Y , −π, r − π, rk , (13)
P P
Pk K M + B + Pk K
= N Y , −π, r − π, rk , (14)
P P
M D + B D + Pk K D M + B + Pk K
= =A (15)
P P
Y
P ×R K
rk = (16)
Pk
35. Money Markets
MD M + B + Pk K
= L Y , −π, r − π, rk , (12)
P P
BD M + B + Pk K
= J Y , −π, r − π, rk , (13)
P P
Pk K M + B + Pk K
= N Y , −π, r − π, rk , (14)
P P
M D + B D + Pk K D M + B + Pk K
= =A (15)
P P
Y
P ×R K
rk = (16)
Pk
36. Money Markets
MD M + B + Pk K
= L Y , −π, r − π, rk , (12)
P P
BD M + B + Pk K
= J Y , −π, r − π, rk , (13)
P P
Pk K M + B + Pk K
= N Y , −π, r − π, rk , (14)
P P
M D + B D + Pk K D M + B + Pk K
= =A (15)
P P
Y
P ×R K
rk = (16)
Pk
37. Put this all together
M M +B RK
= L Y , −π, r − π, rk , + (17)
P P rk
B M +B RK
J Y , −π, r − π, rk , + (18)
P P rk
38. Put this all together
M M +B RK
= L Y , −π, r − π, rk , + (17)
P P rk
B M +B RK
J Y , −π, r − π, rk , + (18)
P P rk
39. Put this all together
M M +B RK
= L Y , −π, r − π, rk , + (17)
P P rk
B M +B RK
J Y , −π, r − π, rk , + (18)
P P rk
46. [Bush’s fiscal stimulus]
Exercise
Consider a standard IS-LM model in equilibrium. Graphically
analyse the effects of a large increase in government expenditure
financed through taxation on output/income and the interest rate,
and briefly explain your reasoning.
47. [The credit crunch]
Exercise
Consider a standard IS-LM model in equilibrium. Graphically
analyse the effects of a large decrease in the supply of money on
output/income and the interest rate, and briefly explain your
reasoning.
48. [Numerical example]
Exercise
Imagine a closed economy with equilibrium output given by
Y = C + I + G . Total supply is given by Y = 5, 000.
Consumption is determined by C = 250 + 0.75(Y − T ).
Investment is given by I = 1000 − 50r . Initially, fix G and T at
G = 1, 000,T = 1, 000. Suppose the government pursues an
expansionary policy, driving G from 1000 to 1250. What happens
to national savings? Is there a deficit? How much of one? Will the
interest rate decrease or increase? By how much?
49. Aggregate Supply
This aggregate production function relates the labour input L and
the level of the capital stock employed to the level of output in the
economy.
Y = F (K , L). (22)
53. [Lifetime earnings and the budget constraint]
Exercise
Jill earns 200 in period 1, and 50 in period two. Jill wants to
consume the same amount throughout her life. Without access to
a credit market, Jill’s consumption stream is {200, 50}. With a
credit market, Jill can consume 200+50/2 = 125 per period, so
her consumption stream at {c1 , c2 }, which is {125, 125}. In reality,
Jill would buy a bond or a treasury bill to achieve consumption
patterns like this. What would her consumption set look like?
54. The Phillips Curve
The Phillips curve relates changes in inflation to changes in
unemployment.
˙
P
p = = α(Y − ¯ )) + π
˙ (Y (30)
P