TheTreasuryInTheFinancialMarkets文件材料.ppt

? 2003 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw Hill / Irwin 19 - * Money and Capital Markets 19 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by Yee-Tien (Ted) Fu The Treasury InThe Financial Markets ? Learning Objectives ? To examine the many important roles played by the government’s Treasury Department. To identify how the government raises new funds and how it spends the funds raised. To understand how the activities of the Treasury Department impact the money and capital markets and the economy. To explore two key government policy tools – fiscal policy and debt management. The Fiscal Policy Activities ofThe U.S. Treasury Source: U.S. Office of Management and Budget Federal Government Revenues, Expenditures, Net Budget Surplus/Deficit The Fiscal Policy Activities ofThe U.S. Treasury Recent Tax and Expenditure Legislation The Economic Recovery Tax Act (1981) aimed to simulate savings and business investment in order to reduce inflationary pressures in the economy. The Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act (1985) mandated reduced budget deficits. The Economic Growth and Tax Relief Reconciliation Act (2001) was designed to encourage the public to save more. The Fiscal Policy Activities ofThe U.S. Treasury Effects of Government Borrowing Borrowing from the nonbank public higher incomes, spending, and interest rates Borrowing from depository institutions no change in the money supply or total reserves; total income, spending, and interest rates rise Borrowing from the Federal Reserve banks money supply increases; total reserves are unchanged, but excess reserves fall; total income, spending and interest rates rise The Fiscal Policy Activities ofThe U.S. Treasury Effects of the Retirement of Government Debt Retiring debt held by the nonbank public lower incomes, spending, and interest rates Retiring debt held by deposit