曼昆 宏观经济学 原版PPT 英文版chap04.pptVIP

* * * The text on this slide is an intuitive way to understand the equation. For students that are more comfortable with concrete numerical examples, you could offer the following: Suppose real GDP is growing by 3% per year over the long run. Thus, production, income, and spending are all growing by 3%. This means that the volume of transactions will be growing as well. The central bank can achieve zero inflation (on average over the long run) simply by setting the growth rate of the money supply at 3%, in which case exactly enough new money is being supplied to facilitate the growth in transactions. * Note: the theory doesn’t predict that the inflation rate will equal the money growth rate. It *does* predict that a change in the money growth rate will cause an equal change in the inflation rate. * Figure 4-2, p.92 Each variable is measured as an annual average over the period 1999-2007. The strong positive correlation is evidence for the Quantity Theory of Money. Source: International Financial Statistics. * The quantity theory of money is intended to explain the long-run relation of inflation and money growth, not the short-run relation. In the long run, inflation and money growth are positively related, as the theory predicts. (In the short run, however, inflation and money growth appear highly negatively correlated! One possible reason is that the causality is reversed in the short run: when inflation rises – or is expected to rise – the Fed cuts back on money growth. If the economy slumps and inflation falls, the Fed increases money growth. It might be appropriate to discuss this when covering the chapters on short-run fluctuations.) sources: CPI - BLS Money supply - Board of Governors of the Federal Reserve obtained from /fred2/ * * Introduction of abbreviation “govt” for “government” It’s quicker and easier for students to write “govt” in their notes. In the U.S., seigniorage accounts for only about 3% of total governme