约克大学summer math 宏观经济lecture 3.pptx

Macroeconomics;Reading for this lecture;Introduction: why study money?;Introduction: why study money?;Introduction: why study money?;Money growth and Inflation;Introduction: why study money?;Introduction: why study money?;Introduction: why study money?;Demand for Money;Demand for Money;The Demand for Money;13 of 32;Money Supply;Monetary Policy;Determination of the Interest Rate;Effects of an increase in nominal income;Money Demand, Money Supply, and the Equilibrium Interest Rate;The IS-LM model;Equilibrium in the goods market exists when production, Y, is equal to the demand for goods, Z. This condition is called the IS relation. In the simple model discussed previously, demand for goods was independent of the interest rate. The equilibrium condition was given by:;Investment, Sales, and the Interest Rate;Determining Output;Determining Output;Determining Output;Deriving the IS Curve;Shifts of the IS Curve vs movements along the IS curve;Shifts of the IS Curve;The LM relation stems from equilibrium in the money market:;An increase in income leads, at a given interest rate, to an increase in the demand for money. Given the money supply, this increase in the demand for money leads to an increase in the equilibrium interest rate.;Financial Markets and the LM Relation;Financial Markets and the LM Relation;Shifts of the LM Curve;The IS–LM Model;Summary We have two equations: IS LM; two endogenous variables: Y i; Three policy variables: G, T, and ;The IS-LM model;A Fiscal contraction, or fiscal consolidation, refers to fiscal policy that reduces the budget deficit. An increase in the deficit is called a fiscal expansion. Taxes affect the IS curve, not the LM curve. However Fiscal policy now potentially has implications for both Y and i (given a fixed money supply);The IS–LM Model;The IS-LM model;Monetary Policy;Monetary Policy, Activity, and the Interest Rate;The IS-LM model;The IS-LM model: an example;The IS-LM model: an example;The IS-LM model: an example;The IS-LM mo