第24章-貨幣和財(cái)政政策的影響課件

TheInfluenceofMonetaryandFiscalPolicyonAggregateDemand240CHAPTER24THEINFLUENCEOFMONETARYANDFISCALPOLICY本章要解決的問題：Howdoestheinterest-rateeffecthelpexplaintheslopeoftheADcurve?HowcanthecentralbankusemonetarypolicytoshifttheADcurve?InwhattwowaysdoesfiscalpolicyaffectAD?Whataretheargumentsforandagainst

usingpolicytotrytostabilizetheeconomy?0IntroductionEarlierchapterscovered:thelong-runeffectsoffiscalpolicy

oninterestrates,investment,economicgrowththelong-runeffectsofmonetarypolicy

onthepricelevelandinflationrateThischapterfocusesontheshort-runeffects

offiscalandmonetarypolicy,

whichworkthroughaggregatedemand.0AggregateDemandRecall,theADcurveslopesdownwardforthreereasons:thewealtheffecttheinterest-rateeffecttheexchange-rateeffectNext:asupply-demandmodelthathelpsexplaintheinterest-rateeffectandhowmonetarypolicyaffectsaggregatedemand.themostimportantoftheseeffectsfortheU.S.economy0TheTheoryofLiquidityPreferenceAsimpletheoryoftheinterestrate(denotedr)radjuststobalancesupplyanddemand

formoneyMoneysupply:assumefixedbycentralbank,doesnotdependoninterestrate0TheTheoryofLiquidityPreferenceMoneydemandreflectshowmuchwealthpeoplewanttoholdinliquidform.Forsimplicity,supposehouseholdwealthincludesonlytwoassets:Money–liquidbutpaysnointerestBonds–payinterestbutnotasliquidAhousehold’s“moneydemand”reflectsitspreferenceforliquidity.Thevariablesthatinfluencemoneydemand:

Y,r,andP.0MoneyDemandSupposerealincome(Y)rises.Otherthingsequal,whathappenstomoneydemand?IfYrises:Householdswanttobuymoreg&s, sotheyneedmoremoney.Togetthismoney,theyattempttosellsomeoftheirbonds.I.e.,anincreaseinYcauses

anincreaseinmoneydemand,otherthingsequal.

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ThedeterminantsofmoneydemandA. Supposerrises,butYandPareunchanged.Whathappenstomoneydemand?B. SupposePrises,butYandrareunchanged.Whathappenstomoneydemand?70A

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AnswersA. Supposerrises,butYandPareunchanged.Whathappenstomoneydemand?

ristheopportunitycostofholdingmoney. Anincreaseinrreducesmoneydemand:Householdsattempttobuybondstotakeadvantageofthehigherinterestrate.

Hence,anincreaseinrcausesadecreaseinmoneydemand,otherthingsequal.80A

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AnswersB. SupposePrises,butYandrareunchanged.Whathappenstomoneydemand? IfYisunchanged,peoplewillwanttobuythesameamountofg&s. SincePishigher,theywillneedmoremoneytodoso. Hence,anincreaseinPcausesanincreaseinmoneydemand,otherthingsequal.90HowrIsDeterminedMScurveisvertical:ChangesinrdonotaffectMS,whichisfixedbytheFed.MDcurveis

downwardsloping:

afallinrincreasesmoneydemand.MInterestrateMSMD1r1QuantityfixedbytheFedEq’m

interestrate0HowtheInterest-RateEffectWorksYPMInterestrateADMSMD1MD2P2P1Y1Y2r2r1AfallinPreducesmoneydemand,whichlowersr.AfallinrincreasesIandthequantityofg&sdemanded.0MonetaryPolicyandAggregateDemandToachievemacroeconomicgoals,theFedcanusemonetarypolicytoshifttheADcurve.TheFed’spolicyinstrumentisMS.ThenewsoftenreportsthattheFedtargetstheinterestrate.moreprecisely,thefederalfundsrate–whichbankschargeeachotheronshort-termloansTochangetheinterestrateandshifttheADcurve,

theFedconductsopenmarketoperations

tochangeMS.0TheEffectsofReducingtheMoneySupplyYPMInterestrateAD1MS1MDP1Y1r1MS2r2AD2Y2TheFedcanraiserbyreducingthemoneysupply.Anincreaseinrreducesthequantityofg&sdemanded.0A

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ExerciseForeachoftheeventsbelow,- determinetheshort-runeffectsonoutput- determinehowtheFedshouldadjustthemoney

supplyandinterestratestostabilizeoutputA. Congresstriestobalancethebudgetbycuttinggovtspending.B. Astockmarketboomincreaseshouseholdwealth.C. WarbreaksoutintheMiddleEast,

causingoilpricestosoar.140A

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AnswersA. Congresstriestobalancethebudgetby

cuttinggovtspending. Thiseventwouldreduceaggdemandandoutput. Tooffsetthisevent,theFedshouldincreaseMSandreducertoincreaseaggdemand.150A

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AnswersB. Astockmarketboomincreaseshouseholdwealth. Thiseventwouldincreaseaggdemand,

raisingoutputaboveitsnaturalrate. Tooffsetthisevent,theFedshouldreduceMSandincreasertoreduceaggdemand.160A

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AnswersC. WarbreaksoutintheMiddleEast,

causingoilpricestosoar. Thiseventwouldreduceaggsupply,

causingoutputtofall. Tooffsetthisevent,theFedshouldincreaseMSandreducertoincreaseaggdemand.170FiscalPolicyandAggregateDemandFiscalpolicy:thesettingofthelevelofgovtspendingandtaxationbygovtpolicymakersExpansionaryfiscalpolicyanincreaseinGand/ordecreaseinTshiftsADrightContractionaryfiscalpolicyadecreaseinGand/orincreaseinTshiftsADleftFiscalpolicyhastwoeffectsonAD.01.TheMultiplierEffectIfthegovtbuys$20bofplanesfromBoeing,Boeing’srevenueincreasesby$20b.ThisisdistributedtoBoeing’sworkers(aswages)andowners(asprofitsorstockdividends).Thesepeoplearealsoconsumers,andwillspendaportionoftheextraincome.Thisextraconsumptioncausesfurtherincreasesinaggregatedemand.Multipliereffect:theadditionalshiftsinAD

thatresultwhenfiscalpolicyincreasesincomeandtherebyincreasesconsumerspending01.TheMultiplierEffectA$20bincreaseinGinitiallyshiftsAD

totherightby$20b.TheincreaseinYcausesCtorise,whichshiftsADfurthertotheright.YPAD1P1AD2AD3Y1Y3Y2$20billion0MarginalPropensitytoConsumeHowbigisthemultipliereffect?

Itdependsonhowmuchconsumersrespondtoincreasesinincome.Marginalpropensitytoconsume(MPC):

thefractionofextraincomethathouseholdsconsumeratherthansaveE.g.,ifMPC=0.8andincomerises$100,

Crises$80.0Notation:GisthechangeinG,

YandCaretheultimatechangesinYandC

Y=C+I+G+NX identity

Y=C+G

IandNXdonotchange

Y=MPC

Y+G becauseC=MPC

Y

solvedforY11–MPCY=GAFormulafortheMultiplierThemultiplier0ThesizeofthemultiplierdependsonMPC.

e.g., ifMPC=0.5 multiplier=2 ifMPC=0.75 multiplier=4 ifMPC=0.9 multiplier=1011–MPCY=GAFormulafortheMultiplierThemultiplierAbiggerMPCmeanschangesinYcausebiggerchangesinC,whichinturncause

morechangesinY.0OtherApplicationsoftheMultiplierEffectThemultipliereffect:

each$1increaseinGcangenerate

morethana$1increaseinaggdemand.AlsotruefortheothercomponentsofGDP.Example:SupposearecessionoverseasreducesdemandforU.S.netexportsby$10b. Initially,aggdemandfallsby$10b. ThefallinYcausesCtofall,whichfurtherreducesaggdemandandincome.02.TheCrowding-OutEffectFiscalpolicyhasanothereffectonAD

thatworksintheoppositedirection.Afiscalexpansionraisesr, whichreducesinvestment, whichreducesthenetincreaseinaggdemand.So,thesizeoftheADshiftmaybesmallerthantheinitialfiscalexpansion.Thisiscalledthecrowding-outeffect.0HowtheCrowding-OutEffectWorksYPMInterestrateAD1MSMD2MD1P1r1r2A$20bincreaseinGinitiallyshiftsADrightby$20bButhigherYincreasesMDandr,whichreducesAD.AD3AD2Y1Y2$20billionY30ChangesinTaxesAtaxcutincreaseshouseholds’take-homepay.Householdsrespondbyspendingaportionofthisextraincome,shiftingADtotheright.Thesizeoftheshiftisaffectedbythemultiplierandcrowding-outeffects.Anotherfactor:whetherhouseholdsperceivethetaxcuttobetemporaryorpermanent.ApermanenttaxcutcausesabiggerincreaseinC–andabiggershiftintheADcurve–

thanatemporarytaxcut.0A

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ExerciseTheeconomyisinrecession.

ShiftingtheADcurverightwardby$200b

wouldendtherecession.A. IfMPC=.8andthereisnocrowdingout,

howmuchshouldCongressincreaseG

toendtherecession?B. Ifthereiscrowdingout,willCongressneedtoincreaseGmoreorlessthanthisamount?280A

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AnswersTheeconomyisinrecession.

ShiftingtheADcurverightwardby$200b

wouldendtherecession.A. IfMPC=0.8andthereisnocrowdingout,

howmuchshouldCongressincreaseG

toendtherecession? Multiplier=1/(1–0.8)=5

IncreaseGby$40b

toshiftaggdemandby5x$40b=$200b.290A

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AnswersTheeconomyisinrecession.

ShiftingtheADcurverightwardby$200b

wouldendtherecession.B. Ifthereiscrowdingout,willCongressneedtoincreaseGmoreorlessthanthisamount? CrowdingoutreducestheimpactofGonAD. Tooffsetthis,CongressshouldincreaseGbyalargeramount.

300FiscalPolicyandAggregateSupplyMosteconomistsbelievetheshort-runeffectsoffiscalpolicymainlyworkthroughaggdemand.Butfiscalpolicymightalsoaffectaggsupply.RecalloneoftheTenPrinciplesfromChap1:

Peoplerespondtoincentives.Acutinthetaxrategivesworkersincentivetoworkmore,soitmightincreasethequantityofg&ssuppliedandshiftAStotheright.Peoplewhobelievethiseffectislargearecalled“Supply-siders.”0FiscalPolicyandAggregateSupplyGovtpurchasesmightaffectaggsupply.Example:Govtincreasesspendingonroads.Betterroadsmayincreasebusinessproductivity,whichincreasesthequantityofg&ssupplied,shiftsAStotheright.Thiseffectisprobablymorerelevantinthelongrun:ittakestimetobuildthenewroadsandputthemintouse.0UsingPolicytoStabilizetheEconomySincetheEmploymentActof1946,economicstabilizationhasbeenagoalofU.S.policy.Economistsdebatehowactivearolethegovtshouldtaketostabilizetheeconomy.0TheCaseforActiveStabilizationPolicyKeynes:“animalspirits”causewavesofpessimismandoptimismamonghouseholdsandfirms,leadingtoshiftsinaggregatedemandandfluctuationsinoutputandemployment.Also,otherfactorscausefluctuations,e.g.,boomsandrecessionsabroadstockmarketboomsandcrashesIfpolicymakersdonothing,thesefluctuationsaredestabilizingtobusinesses,workers,consumers.0TheCaseforActiveStabilizationPolicyProponentsofactivestabilizationpolicy

believethegovtshouldusepolicy

toreducethesefluctuations:WhenGDPfallsbelowitsnaturalrate,

useexpansionarymonetaryorfiscalpolicy

topreventorreducearecession.WhenGDPrisesaboveitsnaturalrate,

usecontractionarypolicytopreventorreduce