Chapter_19　Big Events The Economics多恩布什宏观经济学（）PPT教材课程.pptVIP

Chapter 19 Big Events: The Economics of Depression, Hyperinflation, and Deficits Item Item Item Etc. McGraw-Hill/Irwin Macroeconomics, 10e ? 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Introduction Great events shape both the economy and the study of economics The study of macroeconomics in particular grows out of economic experiences – especially traumatic ones In the Great Depression 25% of the labor force was unemployed During the 20th century many countries experienced hyperinflation Over the later part of the 20th century the budget balance in the U.S. swung from deficit to surplus, and then back to deficit Looking to the future, will the U.S. social security system remain solvent, or will it crash in the 21st century? In this chapter we examine these issues and their influence on economic theory. The Great Depression: The Facts The Great Depression shaped many institutions in the economy, including the Federal Reserve and modern macroeconomics The essential facts about the Depression are shown in Table 19-1 During the Great Depression: The stock market fell by 85% GNP fell by 30% The unemployment rate rose from 3 to 25% Net investment was negative CPI fell nearly 25% [Insert Table 19-1 here] The Great Depression: The Facts What was economic policy during this period? Money stock fell rapidly due to bank failures, increased currency-deposit ratio, and the failure of the Fed to take adequate expansionary measures Fiscal policy was weak Figure 19-2 shows large budget deficits Attempts to balance the budget through increased taxes ? contractionary policies at an inopportune time [Insert Table 19-2 here] The Keynesian Explanation The Great Depression showed: The private economy was inherently unstable Active stabilization policy needed to maintain a strong economy Keynesian model offered: An explanation of what had happened Suggestions for policy measures that could have prevented the Great Depression Suggestions for policy measures that could pre