Through this slide I try hard to explain it in as simple as possible, so you guys easily understand what IL-SM curve is & its derivation graphically & mathematically, and I hope you guys no need to open you books after you go through with it.
In monetary economics, the quantity theory of money (QTM) states that the general price level of goods and services is directly proportional to the amount of money in circulation, or money supply. The theory was challenged by Keynesian economics,but updated and reinvigorated by the monetarist school of economics. While mainstream economists agree that the quantity theory holds true in the long run, there is still disagreement about its applicability in the short run. Critics of the theory argue that money velocity is not stable and, in the short-run, prices are sticky, so the direct relationship between money supply and price level does not hold.
Alternative theories include the real bills doctrine and the more recent fiscal theory of the price level.
Through this slide I try hard to explain it in as simple as possible, so you guys easily understand what IL-SM curve is & its derivation graphically & mathematically, and I hope you guys no need to open you books after you go through with it.
In monetary economics, the quantity theory of money (QTM) states that the general price level of goods and services is directly proportional to the amount of money in circulation, or money supply. The theory was challenged by Keynesian economics,but updated and reinvigorated by the monetarist school of economics. While mainstream economists agree that the quantity theory holds true in the long run, there is still disagreement about its applicability in the short run. Critics of the theory argue that money velocity is not stable and, in the short-run, prices are sticky, so the direct relationship between money supply and price level does not hold.
Alternative theories include the real bills doctrine and the more recent fiscal theory of the price level.
commercial banks are A class banks in Nepal. Nepal rastra banks regulated all banks in Nepal. commercial banks should uses the Basel ii for capital adequacy calculation and all commercial banks should fallow all the directives which provides by NRB.
The classical doctrine—that the economy is always at or near the natural level of real GDP (full employment)—is based on two firmly held beliefs:
The assumption of the full employment of labour and other productive resources
Belief that prices, wages, and interest rates are flexible.
Keynesian Theory
Click on the link to watch full video-
https://youtu.be/mQuFxUCmZOs
The quantum of fund required by big businesses/ corporates for various purposes like expansion, equipment purchase, plant set up, working capital etc. is huge which involves high risk for a single bank to provide the loan required.
Consortium finance is the way by which few banks come together and extend the loan facilities by sharing the loan amount between themselves.
This is also known as joint financing. Loan requirements of government and public sector units are also financed through consortium.
Thank you for watching
Subscribe to DevTech Finance
commercial banks are A class banks in Nepal. Nepal rastra banks regulated all banks in Nepal. commercial banks should uses the Basel ii for capital adequacy calculation and all commercial banks should fallow all the directives which provides by NRB.
The classical doctrine—that the economy is always at or near the natural level of real GDP (full employment)—is based on two firmly held beliefs:
The assumption of the full employment of labour and other productive resources
Belief that prices, wages, and interest rates are flexible.
Keynesian Theory
Click on the link to watch full video-
https://youtu.be/mQuFxUCmZOs
The quantum of fund required by big businesses/ corporates for various purposes like expansion, equipment purchase, plant set up, working capital etc. is huge which involves high risk for a single bank to provide the loan required.
Consortium finance is the way by which few banks come together and extend the loan facilities by sharing the loan amount between themselves.
This is also known as joint financing. Loan requirements of government and public sector units are also financed through consortium.
Thank you for watching
Subscribe to DevTech Finance
Professor Professor Hiroyuki Taguchi - Doctor of Social Sciences (Waseda University) commenced the seminar from a macroeconomic angle with a focus on Abenomics’ influence and the question of tackling mid-income trap in Vietnam. The seemingly dry subject was turned into a fruitful feast of novel information, ideas and well thought-out explanations.
This presentation will discuss central bank policies as it relates to negative interest rates. The following areas will be included
1. Household Debt
2. Government Debt
3. Business Strategy for low interest rates
4. Currency Impact
5. Inflation
A war on thrift? A perversion of the natural order? A mad experiment? As more central banks push their deposit rate structures into negative territory, a vigorous debate has erupted among economists, investors and policy officials about the appropriateness, effectiveness and consequences of negative interest rates.
A war on thrift? A perversion of the natural order? A mad experiment? As more central banks push their deposit rate structures into negative territory, a vigorous debate has erupted among economists, investors and policy officials about the appropriateness, effectiveness and consequences of negative interest rates.
Non-Performing Assets or NPA are like a cancer worm that has been destroying the banking system of India slowly and steadily. NPA are bad loans with banks or other financial institutions whose interests and or principal amounts are overdue for a long time. This time is usually 90 days or more. Like any other business, banks also must run on profits, but NPA eats into that margin for banks.
Substandard Assets : A sub-standard asset was one, which was classified as NPA for a period not exceeding two years. With effect from 31 March 2001, a sub-standard asset is one, which has remained NPA for a period less than or equal to 18 months.Doubtful Assets : A doubtful asset was one, which remained NPA for a period exceeding two years. With effect from 31 March 2001, an asset is to be classified as doubtful, if it has remained NPA for a period exceeding 18 months.Loss Assets : This occurs when the NPA has been recognized as a loss by the bank, or the internal or external auditor or on Reserve Bank of India (RBI) inspection but the loan has not been forgiven completely.
Banks’ lending to persons/corporations etc. who are not creditworthy and taking high risks.
Banks are not diminishing their losses by understanding their bank’s sufficiency on capital and loan loss reserves at a given time;
Promoter of Companies redirecting their funds elsewhere. Banks trying to fund non-viable projects.
In the initial part of the 1990s, Public Sector Banks started experiencing acute capital shortage and losses. The targets set for their operation did not project the utmost need for these corporate goals.
The banks had very little autonomy to price their products; offer products to preferred sectors or spend money for their own profits. For example, Banks were forced to lend to priority sector namely agriculture due to political pressure.
Deficient means to collect and distribute credit information amongst commercial banks;
Banks’ lending to persons/corporations etc. who are not creditworthy and taking high risks.
Banks are not diminishing their losses by understanding their bank’s sufficiency on capital and loan loss reserves at a given time;
Promoter of Companies redirecting their funds elsewhere. Banks trying to fund non-viable projects.
In the initial part of the 1990s, Public Sector Banks started experiencing acute capital shortage and losses. The targets set for their operation did not project the utmost need for these corporate goals.
The banks had very little autonomy to price their products; offer products to preferred sectors or spend money for their own profits. For example, Banks were forced to lend to priority sector namely agriculture due to political pressure.
Deficient means to collect and distribute credit information amongst commercial banks;
Banks must identify early that there is going to be a non-payment and report it to the Central Repository of Information on Large Credits (CRILC).
Below please find a link to our monthly market perspective piece for February. This month, with the prospect for potential policy changes ahead, we take a deeper dive into the concept of inflation and what it means to investors.
Below please find a link to our monthly market perspective piece for February. This month, with the prospect for potential policy changes ahead, we take a deeper dive into the concept of inflation and what it means to investors.
The current economic expansion has achieved 2 significant milestones. And what makes these milestones special is that when combined together, they create an economic paradox.
For starters, the current economic expansion has set the record as the longest period of continuous economic growth in US history.
While at the same time, it has also set the record as being the weakest period of continuous economic growth in US history.
This should raise questions as well as concerns.
The answer to the primary question is as follows: this economic expansion has been completely supported and enabled by unorthodox interest policies by global central banks. Zero % and negative % interest rates around the world has allowed economies to maintain positive, yet muted growth.
The concern with this economic experience is that the majority of this growth has been artificially created.
In this IceCap Global Outlook, we examine the invisible hand and why it is the key to understanding why economic growth is so weak, and better still - what happens next.
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
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
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.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
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 telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
The European Unemployment Puzzle: implications from population aging
Overcoming Japan's Liquidity Trap
1. 0
Overcoming Japan’s Liquidity Trap
Tanweer Akram, PhD
13th International Post Keynesian Conference, Sep 15-18, 2016, Kansas City,
MO, USA
2. 1
IMPORTANT DISCLAIMER AND DISCLOSURE
• Disclaimer: The author’s institutional affiliation is provided solely for
identification purposes. Views expressed are solely those of the author and the
standard disclaimer applies. The views are not necessarily those of Thrivent
Financial, Thrivent Investment Management, or any affiliates. This is for
information purposes only and should not be construed as an offer to buy or sell
any investment product or service.
• Disclosure: Tanweer Akram’s employer, Thrivent Financial, invests in a wide
range of securities. Asset management services are provided by Thrivent Asset
Management, LLC, a wholly owned subsidiary of Thrivent Financial for
Lutherans.
3. 2
MOTIVATION AND MAIN POINTS
• Japan has experienced economic stagnation, deflation, and low interest rates for
more than two decades. The Japanese economy appears to be in a liquidity trap,
a condition in which an economy fails to rebound and lending and borrowing
remain tepid despite low interest rates.
• How can Japan overcome its liquidity trap? Though necessary proposals along
the spirit of Bernanke and/or Krugman are not enough. “Credible” commitment
to low interest rates, even negative rates, and quantitative easing may not be
sufficient to restore prosperity and decent growth. Bernanke and Krugman type
policies might indeed be very useful to stabilize the financial system and keep
government bond yields low or even target long-term interest rates.
• Overcoming liquidity trap requires Keynesian 2.016+ strategies.
4. 3
KEYNESIAN 2.016+ POLICIES
• First, the Japanese authorities need to institute Keynesian policies of support
effective demand through increased public spending in infrastructure and
human capital, and direct job creation, keep taxes low instead of ferreting over
fiscal sustainability, and raise real incomes of the majority of the population.
• Second, Japan also needs Schumpterian policies of creative destruction to
promote entry/exit of firms, innovation, and the collaboration of the public
sector, universities, and private firms in R&D to raise labor productivity and to
create new technology, products, processes, and services.
• Third, Japan needs to encourage selective immigration and take other measures
to increase population growth. At the same time the authorities should try to
raise labor force participation rates for women and senior citizens.
15. 14
WHAT IS A LIQUIDITY TRAP?
• An economic condition which arises when, despite low interest rates,
investors prefer to hold money (cash) rather than invest in the expansion
of gross fixed capital. As a result monetary policy becomes ineffective in
boosting the nation’s productive capacity (equipment,
software/intellectual property, and structures). Low interest rates fails to
induce borrowing/lending.
• Due to increased uncertainty, investors prefer to hold money (cash)
rather than bonds and riskier securities.
• Doesn’t this sound like Japan in the past two decades?
17. 16
THE BOJ’S DECISION IN JAN 2016: NEGATIVE POLICY RATES!
• Pay 10bps on excess reserves created to date under QE.
• Pay zero interest rates on reserves held under minimum reserves,
reserves corresponding to BOJ funding for lending scheme(s), and various
other balances.
• Charge 10bp interest on the remaining reserves (negative interest rate).
The BOJ stated that “it will cut the interest rate further into negative
territory if judged as necessary.”
• Regarding asset purchases, the BOJ reiterated that it “will not set a lower
bound for yields on its JGB purchases”.
19. 18
KRUGMAN AND BERNANKE SEE “EASY MONEY” AS THE SOLUTION
• Krugman (1998a and 1998b) and Bernanke (2000 and 2002).
• Credible commitment to a continuous increase in the money supply and the expansion of
the central bank’s balance sheet. This will increase the public’s inflation expectation.
[when??? Isn’t this like the quantity theory? But central bank balance sheet expansion does
not necessarily lead to credit expansion by banks and financial institutions].
• The key assumption is that monetary accommodation will lead to higher inflationary
expectations. Higher inflationary expectations will mean that real interest rate will be low.
• Their view is that lowering the nominal interest rate as low as possible will induce
investment. [But where is the evidence???].
• But if the nominal interest rate cannot be reduced below some “lower bound” then the
central bank ought to engage in the purchase of long duration assets and reduce long-term
interest rates. [It is true that central bank can control interest rates and buy anything as
long as it is permitted by law]. The wealth effect due to higher asset prices can boost
consumer spending. [okay, but what’s the evidence for Japan???]
20. 19
BERNANKE/KRUGMAN PROPOSALS: THE OLD WINE OF QTM?
• MV = PQ
• 𝝆 𝑬
= 𝒊 − 𝝅 𝑬
• ↑ 𝑯 ⇒↑ 𝑴 𝐚𝐧𝐝/𝐨𝐫 ↑ 𝑴 ⇒↑ 𝝅 𝑬
(This really is a strange idea but a quite popular view. Alas!)
• Is this the old wine of the Quantity Theory of Money?
• However, there is no reason to think that an increase the central bank’s balance
sheet can lead to an increase in banks’ loans and financial institutions’ lending to
the real economy and that firms will boost investment just because the central
bank is expanding its balance sheet, lowering the policy rate or other rates,
and/or purchasing assorted financial assets.
21. 20
KRUGMAN & BERNANKE: I. FISHER, A.C. PIGOU AND M. FRIEDMAN
• Ultimately,
Krugman’s and
Bernanke’s
proposals are
based on the
ideas of Fisher,
Pigou, and
Friedman and
indeed even
partly on
Keynes’s (1930)
Treatise on
Money!
22. 21
JOAN ROBINSON ON THE QUANTITY THEORY OF MONEY
• “No one who understand the rules of logic ever expected
a truism, such as MV=PT, to tell us anything that we do
not know without it, but in inexpert hands the Quantity
Equation can lead to great confusion. … First, it leads
people to discuss changes of prices without making the
vital distinction between a change due to a change on
the side of demand, … and a change of price due to a
change on the side of supply … .Second, it leads people
to attribute some kind of direct influence upon prices to
change in the quantity of money, so that some writers
seem to suggest that bank-notes have feet, and run into
shops and bid up prices as soon as they are
printed.” [Joan Robinson 1969 edition, p.77]. (emphasis
added).
23. 22
LOW INTEREST RATES AND LIQUIDITY TRAP
• Keynes (1936) held that “if investor expect interest rate to rise more than the
square of the current interest rate they would prefer to hold money instead of
bond because of capital loss” and “the lower the rate of interest, the more likely
that liquidity trap will be sprung, since the longer it takes to recoup the capital
loss through higher interest rates earnings and thus the higher the probability
there will be a reversal in interest rates.” (Kregel 2000)
• Intuition: The lower the rate of interest the higher the duration of a bond. This
means it takes more time to recover the capital loss of an interest rate rise to be
offset from reinvestment earnings due to the rise in the interest rate. So investors
hold cash rather than bonds, prefer liquidity over riskier assets and investments.
• Liquidity trap arises from fundamental uncertainty and generalized pessimism
about the prospects of returns to capital and even capitalism.
24. 23
HOWEVER INVESTMENT DEPENDS NOT JUST ON THE INTEREST RATE
• 𝕀 ≤ 𝑭 𝒓 𝑬
, 𝒊 where 𝑟 is the expected rate of profit, 𝑖 is the interest rate.
• 𝒓 𝑬
= 𝑮 𝑺 𝑬
where the expected rate of profit depends on expected sales (effective
demand).
• If the expected profits and expected sales are poor, if the outlook is not good and uncertain,
businesses and investors will not expand capacity. “Animal spirits” won’t return even if
interest rates are low (or even negative).
• When 𝒓 𝑬
≥ 𝒊 ⇒ 𝑰 = 𝑭 𝒓 𝑬
, 𝒊 but 𝒓 𝑬
< 𝒊 ⇒ 𝑰 < 𝑭 𝒓 𝑬
, 𝒊 .
• Policymakers can take various measures to restore animals spirits. A combination of pubic
spending in infrastructure and human capital, direct public sector employment, no tax hikes
and a favorable tax regime can enhance effective demand and restore animal spirits.
• Policymakers should be willing to experiment to see what works!
26. 25
KEYNESIAN POLICIES 2.016+ = KEYNES 1.936 + SCHUMPETER 1.934
• Keynesian policies: Fiscal policy and monetary policy must be
accommodative. These policies are necessary prerequisites to overcome
cyclical weakness. It is a not a good idea to raise taxes in the name of
fiscal sustainability. The authorities should aim to restore real and
nominal wage growth.
• Schumpeterian policies: Structural reforms to foster higher productivity
growth are also important. The authorities should promote collaboration
among public sector, universities, and firms for R&D. The government
should supports innovation in the public sector, enable industrial
transformation, and develop human capital and capabilities.
• Keynesian policies aimed at full employment make creative destruction
palatable, encourage firms to take risks, and ensure effective demand.
28. 27
DEMOGRAPHICS
• What does unfavorable demographics imply?
• A shrinking labor force will lead to supply constraints and weaker aggregate
demand. With a shrinking labor force, labor productivity growth is absolutely
essential for maintaining and improving Japan’s per capita real income.
• Japan needs to become more open to immigration. Immigrants will increase the
amount of available labor. First generation immigrants also tend to have higher
birth rate. It can also increase demand for goods, services, and housing. This is
by no means easy in Japan given the closed nature of the society and historical
experience.
• Policymakers should encourage higher labor force participation rate among
women and senior citizens. Better childcare and paternity benefits may increase
fertility rate slightly.