宏觀經(jīng)濟(jì)學(xué)（第十三版）課件：Monetary and Fiscal Policy

MonetaryandFiscalPolicy

.IntroductionInthischapterweusetheIS-LMmodeldevelopedinChapter11toshowhowmonetaryandfiscalpolicyworkFiscalpolicyhasitsinitialimpactinthegoodsmarketMonetarypolicyhasitsinitialimpactmainlyintheassetsmarketsBecausethegoodsandassetsmarketsareinterconnected,bothfiscalandmonetarypolicieshaveeffectsonboththelevelofoutputandinterestratesExpansionary/contractionarymonetarypolicymovestheLMcurvetotheright/leftExpansionary/contractionaryfiscalpolicymovestheIScurvetotheright/left12-2MonetaryPolicy

12-3TheFederalReserveisresponsibleformonetarypolicyintheU.S.conductedmainlythroughopenmarketoperationsOpenmarketoperations:buyingandsellingofgovernmentbondsFedbuysbondsinexchangeformoneyincreasesthestockofmoney(Fig.12-3)FedsellsbondsinexchangeformoneypaidbypurchasersofthebondsreducingthemoneystockMonetaryPolicy

12-4Adjustmenttothemonetaryexpansion:IncreaseinmoneysupplycreatesexcesssupplyofmoneyPublicbuysotherassetsAssetpricesincrease,yieldsdecreasemovetopointE1DeclineininterestrateresultsinexcessdemandforgoodsOutputexpandsandmoveupLM’scheduleTransitionMechanismTwostepsinthetransmissionmechanism(theprocessbywhichchangesinmonetarypolicyaffectAD):AnincreaseinrealbalancesgeneratesaportfoliodisequilibriumAttheprevailinginterestrateandlevelofincome,peopleareholdingmoremoneythantheywantPortfolioholdersattempttoreducetheirmoneyholdingsbybuyingotherassetschangesassetpricesandyieldsThechangeinmoneysupplychangesinterestratesAchangeininterestratesaffectsAD12-5TheLiquidityTrapTwoextremecasesarisewhendiscussingtheeffectsofmonetarypolicyontheeconomyfirstistheliquiditytrapLiquiditytrap=asituationinwhichthepublicisprepared,atagiveninterestrate,toholdwhateveramountofmoneyissuppliedImpliestheLMcurveishorizontalchangesinthequantityofmoneydonotshiftitMonetarypolicyhasnoimpactoneithertheinterestrateorthelevelofincomemonetarypolicyispowerlessPossibilityofaliquiditytrapatlowinterestratesisanotionthatgrewoutofthetheoriesofEnglisheconomistJohnMaynardKeynes12-6Banks’ReluctancetoLendTwoextremecasesarisewhendiscussingtheeffectsofmonetarypolicyontheeconomysecondisthereluctanceofbankstolendAnothersituationinwhichmonetarypolicyispowerlesstoaltertheeconomybreakdowninthetransmissionmechanismDespitelowerinterestratesandincreaseddemandforinvestment,banksmaybeunwillingtomaketheloansnecessaryfortheinvestmentpurchasesIfbanksmadepriorbadloansthatarenotrepaid,maybecomereluctanttomakemore,despitedemandpreferinsteadtolendtothegovernment(safer)12-7TheClassicalCaseTheoppositeofthehorizontalLMcurve(impliesthatmonetarypolicycannotaffectthelevelofincome)istheverticalLMcurveDemandformoneyisentirelyunresponsivetotheinterestrateRecall,theequationfortheLMcurveis(1)Ifhiszero,thenthereisauniquelevelofincomecorrespondingtoagivenrealmoneysupply

VERTICALLMCURVETheverticalLMcurveiscalledtheclassicalcaseRewriteequation(1),withh=0:(2)ImpliesthatNGDPdependsonlyonthequantityofmoney

quantitytheoryofmoney12-8TheClassicalCaseWhentheLMcurveisverticalAgivenchangeinthequantityofmoneyhasamaximaleffectonthelevelofincomeShiftsintheIScurvedonotaffectthelevelofincomeVerticalLMcurveimpliesthecomparativeeffectivenessofmonetarypolicyoverfiscalpolicy“Onlymoneymatters”forthedeterminationofoutputRequiresthatthedemandformoneybeirresponsivetoiimportantissueindeterminingtheeffectivenessofalternativepolicies12-9FiscalPolicyandCrowdingOutTheequationfortheIScurveis:(3)Thefiscalpolicyvariables,Gandt,arewithinthisdefinitionGisapartofAtisapartofthemultiplierFiscalpolicyactions,changesinGandt,affecttheIScurveSupposeGincreasesAtunchangedinterestrates,ADincreasesTomeetincreaseddemand,outputmustincreaseAteachleveloftheinterestrate,equilibriumincomemustriseby12-10FiscalPolicyandCrowdingOut

12-11Ifgovernmentexpendituresincrease,equilibriummovestofromE’toE”ThegoodsmarketisinequilibriumatE”,butthemoneymarketisnot:BecauseYhasincreased,thedemandformoneyalsoincreasesinterestrateincreasesFirms’plannedinvestmentspendingdeclinesandADfallsmoveuptheLMcurvetoE’FiscalPolicyandCrowdingOut

12-12ComparingEtoE’:increasedgovernmentspendingincreasesincomeandtheinterestrateComparingE’toE”:adjustmentofinterestratesandtheirimpactonADdampenexpansionaryeffectofincreasedGIncomeincreasestoY’0insteadofY”TheCompositionofOutput

andthePolicyMixTable12-2summarizeseffectsofexpansionarymonetaryandfiscalpolicyonoutputandtheinterestrateMonetarypolicyoperatesbystimulatinginterest-responsivecomponentsofADFiscalpolicyoperatesthroughGandtimpactdependsuponwhatgoodsthegovernmentbuysandwhattaxesandtransfersitchanges12-13TheCompositionofOutput

andthePolicyMix

12-14Policyproblemofreachingfullemploymentoutput,Y*,foraneconomythatisinitiallyatpointE,withunemploymentChoices:Fiscalpolicyexpansion,movingtopointE1,withhigherincomeandhigherinterestratesMone