金融学（第四版）课件：The Challenges of Monetary Policy

TheChallengesofMonetaryPolicy

2TheGoalsofMonetaryPolicyMacroeconomicpolicyconsistsofmonetarypolicytheFed’suseofitspolicyinstrumentstoaffectthecostandavailabilityoffundsintheeconomyfiscalpolicyalterationsingovernmentspendingortaxesproposedandenactedbyCongressandthePresident3TheGoalsofMonetaryPolicyInconductingmonetarypolicy,theFedworksthroughthefinancialsystemtheFed’sprimarytoolsincludecontrolofthemonetarybase,therequiredreserveratioandthediscountrateMonetarypolicyaffectstheborrowing,lending,spending,andsavingdecisionsofhouseholds,businessfirms,thegovernment,andtherestoftheworld4TheGoalsofMonetaryPolicyThespecificgoalsofmonetarypolicyaretodesignandimplementpoliciesthatwillachievesustainableeconomicgrowthfullemploymentstablepricesasatisfactoryexternalbalance5TheGoalsofMonetaryPolicyAchievingthesegoalsintheshortrunhelpstoachievemaximumsustainableeconomicgrowthinthelongrunSustainableEconomicGrowthdeterminedbythegrowthandproductivityoflaborandcapitalLongRunShortRunFullEmploymentStablePricesSatisfactoryExternalBalancecompatiblewithfullemploymentandstableprices6EconomicGrowthIfthenation’sstandardoflivingistoriseovertime,theproductivecapacityoftheeconomymustexpandgrowthofthecapitalstockgrowthofthelaborforceariseinproductivity7EconomicGrowthThegrowthofthecapitaldependsontheamountofinvestmentspendingundertakenbyfirmsthechangeinthecapitalstock=netinvestmentspendingTheproductivityofcapitalisrelatedtotheamountofresourcesdevotedtoresearchanddevelopmentandontheresultingtechnologicaladvances8EconomicGrowthThegrowthofthelaborsupplyflowsfromthegrowthofthepopulationandfromincreasesinlaborforceparticipationratesTheproductivityoflaboristhoughttodependontheeducationalattainmentandhealthofworkers,thequantityandqualityofcapitalavailable,andthecompetitiveenvironmentfacedbyfirmsandworkers9EconomicGrowthIngeneral,athrivingnation’sproductivecapacitygrowsovertimeMacroeconomicpolicyinfluencesthepaceinanumberofwaystaxpolicycanaffectafirm’sdesiretoinvestorengageinresearchanddevelopment,andcanaffectahousehold’sdecisiontoworkandsaveinterestratesalsoinfluencespendingandsavingdecisions10EconomicGrowthAstableenvironmentwillalsobemoreconducivetofarsightedplanninganddecisionmakingthatenhanceaneconomy’slong-rungrowthpotentialhighratesofcapacityutilizationandemploymentoutputgrowingatasteady,sustainablerate11SteadyNoninflationaryGrowthPriceLevelRealGDP(inBillions)1.00$4,000AADLRASAD'BLRAS'$4,120CAD''LRAS''$4,24412EconomicGrowthAnunstableenvironmentcharacterizedbyaseriesofinflationaryboomsanddeflationaryrecessionsislikelytoinhibiteconomicgrowthaggregatedemandgrowsfasterorslowerthanaggregatesupply13UnstableGrowthPriceLevelRealGDP(inBillions)1.00$4,000AADLRASI1.05AD'DLRAS'$4,1201.10AD''LRAS''$4,24414EconomicGrowthShort-runstabilizationobjectivesarenotseparatefromthelongrungoalofeconomicgrowthshort-runfluctuationsaroundthetrendinfluencethetrenditself15StabilizationofUnemployment,InflationandtheExternalBalanceInorderforoureconomictoreachitsfullpotential,allindividualsmusthavetheopportunitytobecomeproductive,employedmembersofsocietyoutputthatcouldhavebeenproducedlastyearbythoseunemployedislostforever16StabilizationofUnemployment,InflationandtheExternalBalanceTounderstandwhypolicymakersworryaboutinflation,itisusefultodistinguishbetweenexpectedinflationandunexpectedinflationSupposethathouseholdsexpecttheinflationratetobe3%nextyearworkerswilltrytosecurewageincreasesofatleast3%netlenderswillalsotakethisintoaccount17StabilizationofUnemployment,InflationandtheExternalBalanceSupposethattheinflationratenextyearturnsouttobe5%therealwageofworkerswillfallfirmswillwishtoexpandproductionbecausetheiroutputpriceisrisingrelativetoinputpricestherealreturnonfinancialassetswillbelessthananticipated18StabilizationofUnemployment,InflationandtheExternalBalanceUnexpectedinflationredistributesincomeinarbitraryandunpredictablewaysfromworkerstofirmsfromlenderstoborrowersfromthoseonfixedincomestothosewithvariableincomesthatrisewithinflation19StabilizationofUnemployment,InflationandtheExternalBalanceInaddition,manyfirmsandhouseholdswillpayproportionatelymoreintaxesinaninflationaryenvironment20StabilizationofUnemployment,InflationandtheExternalBalanceSupposethatahouseholdearns4%onitssurplusfunds,thehouseholdisinthe25%taxbracket,andexpectedandunexpectedinflationiszeroItsrealafter-taxreturnis21StabilizationofUnemployment,InflationandtheExternalBalanceSupposethatexpectedandunexpectedinflationis2%sothenominalinterestraterisesto6%Thehousehold’srealafter-taxreturnisnow22StabilizationofUnemployment,InflationandtheExternalBalanceSincenominalreturnsaretaxed(ratherthanrealreturns)inflationresultsinthegovernmenttakingalargerportionofinterestincomeInflationalsoreducestherealvalueofnominalmoneybalancesheldinflationactsasataxonmoneyholdings23StabilizationofUnemployment,InflationandtheExternalBalanceResearchershavealsofoundthatastheinflationraterises,thevariabilityofinflationtendstoincreasetherelationshipamongrelativepricesbecomesmorevolatileanddifficulttopredictpricing,production,saving,andinvestmentdecisionshavetobemadeinamoreuncertainenvironmentfirmsandhouseholdswillbemorecautiousinmakinglong-termcommitments24StabilizationofUnemployment,InflationandtheExternalBalanceInflationcanalsoaffectanation’sinternationalcompetitivenessifpricesofgoodsintheU.S.riserelativetothepricesofcompetinggoodsintherestoftheworld,thedemandforU.S.productswillfallproductionandemploymentintheU.S.willdeclineU.S.firmscouldloseaportionoftheirshareofworldmarkets25StabilizationofUnemployment,InflationandtheExternalBalancePolicymakersshouldalsobeonthealertfordeflationafallingoverallpricelevelDeflationcanbeworsethaninflationbecauseitcanleadtodebtdeflation,defaults,andbankruptcies26NumericalObjectivesforUnemploymentandInflationGeneralguidelinesforpolicymakersarecontainedintwostatutestheEmploymentActof1946

theHumphrey-HawkinsFullEmploymentandBalancedGrowthActof197827NumericalObjectivesforUnemploymentandInflationBothstatutesdirectpolicymakerstopursuepoliciesthatareconsistentwithachievingfullemploymentandnoninflationarygrowthleavesittopolicymakerstodeterminetherateofunemploymentconsistentwithfullemploymentandnonacceleratinginflation28NumericalObjectivesforUnemploymentandInflationIntheearlyyearsofthe21stcentury,mostestimatesofsustainableemploymentimplyanunemploymentrateofabout4.0to4.5%thisisoftencalledthenaturalrateofunemploymentthisisbelievedtobetheunemploymentratethatisconsistentwithstablepricesthisistheunemploymentratethatcorrespondstothenaturalrateofoutput29NumericalObjectivesforUnemploymentandInflationOvertime,policymakersdesirepricestabilityandoftenstressthatthisshouldbetheprimaryobjectiveofmonetarypolicypricestabilitymeans0%inflationtosomeanalystsand1to2%inflationtootherseconomistsworrythatwhentheinflationrateis0%,theeconomycouldslipintoadeflation30NumericalObjectivesforUnemploymentandInflationInsettingtheinflationgoalovertheshortterm,policymakersconsiderrecentexperienceandattempttobalancetheirdesiretoreduceinflationwiththeirdesiretominimizetheaccompanyingadverseeffectsonunemploymentandeconomicgrowth31NumericalObjectivesforUnemploymentandInflationInthelongrun,thegoalsofstablepricesandfullemploymentarebelievedtobeperfectlycompatibleBasedonourhistoricalexperience,thepotentiallong-rungrowthrateforrealGDPhasbeenestimatedtobebetween2.5to3%peryear32ChangesinAggregateDemandandPolicyTheobviousgoalsofmonetarypolicyaretoachievesuccessivelong-runequilibriumswithsustainablenoninflationarygrowthoccursifbothaggregatedemandandaggregatesupplyareshiftingoutatthesamerate33SteadyNoninflationaryGrowthPriceLevelRealGDP(inBillions)1.00$4,000AADLRASAD'BLRAS'$4,120CAD''LRAS''$4,24434ChangesinAggregateDemandandPolicyUnfortunately,theeconomymayoftenfallshortofachievingthesegoalspolicymakersmayneedtoreacttochangesortoinitiatechangesthatguidetheeconomyintherightdirection35ChangesinAggregateDemandandPolicySupposethattheeconomyiscurrentlyinlong-runequilibriumtheexpectedpricelevelisequaltotheactualpriceleveltheeconomyisoperatingatitsnaturalrateofoutput($1,500billion)36AnUnexpectedIncreaseinAggregateDemandwithNoFedResponseRealGDP(inBillions)1.00$1,500AADLRASSRASPriceLevel37ChangesinAggregateDemandandPolicySupposethataggregatedemandincreasesunexpectedlyIntheshort-run,theeconomywillmovetopointBoutputrisesto$1,700billionthepricelevelrisesto1.0538AnUnexpectedIncreaseinAggregateDemandwithNoFedResponseRealGDP(inBillions)1.00$1,500AADLRASSRASPriceLevelAD’B$1,7001.0539ChangesinAggregateDemandandPolicyAsproducersattempttocontinuetoexpandoutput,inputpriceswillriseshort-runaggregatesupplywilldecreaseTheeconomywillreturntoanewlong-runequilibriumatpointCahigherpricelevelnochangeinoutput40AnUnexpectedIncreaseinAggregateDemandwithNoFedResponseRealGDP(inBillions)1.00$1,500AADLRASSRASPriceLevelAD’B$1,7001.05SRAS’C1.1041ChangesinAggregateDemandandPolicyPolicymakerscouldinterveneandacttoreduceaggregatedemandtightermonetarypolicythatreducesthegrowthrateofmoneyandcreditandraisesinterestratesslowergovernmentspendingoranincreaseintaxes42ChangesinAggregateDemandandPolicyIneithercase,thelevelofspendingandaggregatedemandwouldbereducedtheeconomywouldthenreturntolong-runequilibriumatalowerpriceleveltheeconomymovesfrompointAtopointBandthenbacktopointA43PossiblePolicymakerResponsetoanUnexpectedRiseinAggregateDemandRealGDP(inBillions)1.00$1,500ALRASSRASPriceLevelAD’B$1,7001.05AD44Demand-InducedRecessionTheinitialeffectofanunexpecteddeclineinaggregatedemandisanunanticipatedriseininventoriesinresponse,businessfirmswillcutproduction,employment,andpricesoutputpricestendtofallrelativetoinputprices45Demand-InducedRecessionOnceagain,supposetheeconomyisinitiallyinlong-runequilibriumtheexpectedpricelevelisequaltotheactualpriceleveltheeconomyisoperatingatitsnaturalrateofoutputAggregatedemandunexpectedlydeclinestheeconomymovesfrompointAtopointBoutputandthepricelevelbothfall46Demand-InducedRecessionTheeconomycantaketwopossiblepathsbacktolong-runequilibriuminputpricescandeclinesincetheactualpricelevelislowerthantheexpectedpriceleveltheshort-runaggregatesupplycurveshiftsrighttheeconomymovesfrompointAtopointBtopointCpolicymakerscanboostaggregatedemandtheeconomymovesfrompointAtopointBandbacktopointA47Demand-InducedRecessionPriceLevelLRASSRASADAAD'RealGDP(inBillions)1.00B0.9548Demand-InducedRecessionPriceLevelLRASSRASADAAD'RealGDP(inBillions)1.00B0.95SRAS’C0.9049Demand-InducedRecessionPriceLevelLRASSRASADAAD'RealGDP(inBillions)1.00B0.9550Demand-InducedRecessionWhichpathdoestheeconomyusuallytake?recessionsgeneratepoliticalpressureforpolicymakersto“dosomething”iffirmsandhouseholdsexpectpolicymakerstoact,adownwardadjustmentinpriceswillbeslowtodevelopandtheeconomymaystagnateleadingtoevenmorepressureonpolicymakerstoboostaggregatedemand51ChangesinAggregateSupplyandPolicyAsupplyshock

isanyeventthatshiftstheaggregatesupplycurveasignificantriseinthepriceofoilmajorcropfailuresornationaldisastersanythingthataffectsthenation’sproductivecapacity52ChangesinAggregateSupplyandPolicyAssumethattheeconomyisinitiallyinlong-runequilibriumtheexpectedpricelevelisequaltotheactualpriceleveltheeconomyisoperatingatitsnaturalrateofoutputSupposethereisanadversesupplyshockforexample,assumethepriceofoilrisessubstantially53ChangesinAggregateSupplyandPolicyFirmsfeelthesupplyshockimmediatelythecostofproductionrisesrelativetooutputpricetheshort-runaggregatesupplycurveshiftstotheleftthepricelevelrisesandoutputfallstheeconomymovesfrompointAtopointB54ChangesinAggregateSupplyandPolicyPolicymakersfaceadilemmabecausetheeconomyisexperiencingbothinflationandarecessiontheeconomyisexperiencingcost-pushinflationtriggeredbyincreasesininputpricesrealoutputisbelowitsnaturallevel55AnAdverseSupplyShockasaCauseofCost-PushInflationPriceLevelLRASADARealGDPSRASSRAS'B56ChangesinAggregateSupplyandPolicyPolicymakerscanboostaggregatedemandthisiscalledaccommodationthiswillmovetheeconomyfrompointBtopointCtherecessionwillbeshort-livedtheinflationproblemwillbemagnified57AnAdverseSupplyShockasaCauseofCost-PushInflationPriceLevelLRASADARealGDPSRASSRAS'BAD’C58ChangesinAggregateSupplyandPolicyPolicymakerscanchoosetodonothingidleplantsandunemploymentintheeconomywillputdownwardpressureoninputpricesshort-runaggregatesupplywilleventuallyshifttotheright59ChangesinAggregateSupplyandPolicySupplyshocksarenotalwaysadversetherewasasubstantialdropinthepriceofoilinlate198560SummaryofMajorPointsThegoalofmonetarypolicyistoinfluencetheoverallperformanceoftheeconomythesizeoftheeconomicpieinthelongrunisinfluencedbythegrowthofthelaborforceandthecapitalstockandbyincreasesintheproductivityoftheseinputsgovernmentpoliciesaffectincentivestowork,invest,andsavetotheextentthatpoliciesencourageastableenvironment,growthisalsoaffected61SummaryofMajorPointsInadditiontoeconomicgrowth,fullemployment,pricestability,andasatisfactoryexternalbalancearealsogoalsofmonetarypolicyovertheshortrun,economicgrowthdependsonthegrowthofaggregatedemandtoaggregatesupplyanunstableshort-runenvironmentisbelievedtohaveanadverseeffectonlong-rungrowth62SummaryofMajorPointsFullemploymentisagoalbecauseifanationistoreachitsfullpotential,individualsmusthaveanopportunitytobecomeproductivemembersofsocietyPricestabilityisagoalbecauseinflationtendstoredistributeincomeinarbitraryandunpredictablewaysalsocontributes