布兰查德宏观经济学ppt第14章.pptVIP

Nominal Versus RealInterest Rates Interest Rates expressed in terms of dollars (or, more generally, in units of the national currency) are called nominal interest rates Interest rates expressed in terms of a basket of goods are called real interest rates. Nominal Versus RealInterest Rates Definition and Derivation of the Real Interest Rate Nominal Versus RealInterest Rates then, the expected rate of inflation equals Nominal Versus RealInterest Rates Here are some of the implications of the relation above: If If if Nominal and Real Interest Rates in the United States Since 1978 Expected PresentDiscounted Values Computing Present Discounted Values Computing Expected Present Discounted Values (a) One dollar this year is worth 1+it dollars next year. (b) If you lend/borrow 1/(1+it) dollars this year, you will receive/repaydollar next year. Computing Expected Present Discounted Values The word “discounted” comes from the fact that the value next year is discounted, with (1+it) being the discount factor. (The 1-year nominal interest rate, it, is sometimes called the discount rate. A General Formula The present discounted value of a sequence of payments, or value in today’s dollars equals: When future payments or interest rates are uncertain, then: Present discounted value, or present value are another way of saying “”expected present discounted value.” Using Present Values: Examples This formula has these implications: Present value depends positively on today’s actual payment and expected future payments. Present value depends negatively on current and expected future interest rates. Constant Interest Rates To focus on the effects of the sequence of payments on the present value, assume that interest rates are expected to be constant over time, then: Constant Interest Ratesand Payments When the sequence of payments is equal—called them $z, the present value formula simplifies to: The terms in the expression in brackets represent a geometric series. Computi