说明成果经济学lecture.pptVIP

chapter: 31 Krugman/Wells ©2009  Worth Publishers Monetary Policy What the money demand curve is Why the liquidity preference model determines the interest rate in the short run How the Federal Reserve can implement monetary policy moving the interest rate to affect aggregate output Why monetary policy is the main tool for stabilizing the economy How the behavior of the Federal Reserve compares to that of other central banks Why economists believe in monetary neutrality — that monetary policy affects only the price level, not aggregate output, in the long run The Demand for Money The Opportunity Cost of Holding Money Short-term interest rates are the interest rates on financial assets that mature within six months or less. Long-term interest rates are interest rates on financial assets that mature a number of years in the future. The Demand for Money Interest Rates and the Opportunity Cost of Holding Money Fear and Interest Rates Treasury bills generally pay a slightly lower interest rate than other short-term assets in normal times. In the third week of October 2008, one-month CDs were paying 4.04% interest, but one-month Treasury bills were paying only 0.26%. The reason: fear. A sharp plunge in housing prices had led to big losses at a number of financial institutions, leaving investors nervous about the safety of many non-government assets. On December 10, 2008, in fact, three-month Treasury bills paid 0% interest for a brief period. The Money Demand Curve The money demand curve shows the relationship between the quantity of money demanded and the interest rate. The Money Demand Curve Interest rate, r Quantity of money Money demand curve, MD Shifts of the Real Money Demand Curve Changes in Aggregate Price Level Changes in Real GDP Changes in Technology Changes in Institutions Increases and Decreases in the Demand for Money A fall in money demand shifts the money demand curve to the left.. A rise in money demand shifts the money demand curve to the right. A