鲁迪格·多恩布什-宏观经济学（第十三版）IPPTChap012.pptVIP

Monetary and Fiscal PolicyChapter #12Copyright ? 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. IntroductionIn this chapter we use the IS-LM model developed in Chapter 11 to show how monetary and fiscal policy workFiscal policy has its initial impact in the goods marketMonetary policy has its initial impact mainly in the assets marketsBecause the goods and assets markets are interconnected, both fiscal and monetary policies have effects on both the level of output and interest ratesExpansionary/contractionary monetary policy moves the LM curve to the right/leftExpansionary/contractionary fiscal policy moves the IS curve to the right/left12-2 Monetary Policy 12-3The Federal Reserve is responsible for monetary policy in the U.S. ? conducted mainly through open market operationsOpen market operations: buying and selling of government bondsFed buys bonds in exchange for money ? increases the stock of money (Fig. 12-3)Fed sells bonds in exchange for money paid by purchasers of the bonds ? reducing the money stock Monetary Policy 12-4Adjustment to the monetary expansion:Increase in money supply creates excess supply of moneyPublic buys other assets Asset prices increase, yields decrease ? move to point E1Decline in interest rate results in excess demand for goodsOutput expands and move up LM’ schedule Transition MechanismTwo steps in the transmission mechanism (the process by which changes in monetary policy affect AD):An increase in real balances generates a portfolio disequilibriumAt the prevailing interest rate and level of income, people are holding more money than they wantPortfolio holders attempt to reduce their money holdings by buying other assets ? changes asset prices and yields The change in money supply changes interest ratesA change in interest rates affects AD12-5 The Liquidity TrapTwo extreme cases arise when discussing the effects of monetary policy on the econom