巴罗宏观经济学：现代观点第10章.ppt

1、Macroeconomics Chapter 10,1,The Demand for Money and the Price Level,C h a p t e r 1 0,Macroeconomics Chapter 10,2,Macroeconomics Chapter 10,3,Concepts of Money,Fiat money has value due to government fiat, rather than through intrinsic value. Commodity money, such as gold and silver coins, which do

2、have intrinsic value. High-powered money, which adds the deposits held by banks and other depository institutions At the Federal Reserve. Another name for high-powered money is the monetary base.,Macroeconomics Chapter 10,4,Concepts of Money,Monetary aggregate A monetary aggregate is the total dolla

3、r stock of a group of financial assets defined to be money. The most common definition, called M1 Checkable deposits issued by banks and other financial institutions.,Macroeconomics Chapter 10,5,Macroeconomics Chapter 10,6,Macroeconomics Chapter 10,7,Concepts of Money,Monetary aggregate M2 includes

4、household holdings of savings deposits, small-time deposits, and retail money-market mutual funds. The M2 definition goes beyond the concept of money as a medium of exchange. In our model, it is best to use a narrower definition of money, for example, as currency held by the public.,Macroeconomics C

5、hapter 10,8,The Demand for Money,Money is hand-to-hand currency Assume that the interest rate paid on money is zero. Bonds and ownership of capital Interest-bearing assets These assets pay a positive return to the holder.,Macroeconomics Chapter 10,9,The Demand for Money,The household budget constrai

6、nt in nominal terms PC + B + PK = + wL + i ( B+ PK) nominal consumption + nominal saving = nominal income,Macroeconomics Chapter 10,10,The Demand for Money,“demand for money,” Md, The average holding of money that results from the households optimal strategy for money management.,Macroeconomics Chap

7、ter 10,11,The Demand for Money,The Interest Rate and the Demand for Money A higher interest rate, i, provides a greater incentive to hold down average holdings of money, M, in order to raise average holdings of interest-bearing assets, B + PK. That is, with a higher i, households are more willing to

8、 incur transaction costs in order to reduce M,Macroeconomics Chapter 10,12,The Demand for Money,The Interest Rate and the Demand for Money We predict, accordingly, that an increase in i reduces the nominal demand for money, Md. For a given price level, P, we can also say that a higher i lowers the r

9、eal demand for money, Md/P.,Macroeconomics Chapter 10,13,The Demand for Money,The Price Level and the Demand for Money Suppose that the price level, P, doubles. The nominal demand for money, Md, doubles. Since Md and P have both doubled, the ratio, Md/P, is the same. The result is that the real dema

10、nd for money, Md/P, does not change when P changes.,Macroeconomics Chapter 10,14,The Demand for Money,Real GDP and the Demand for Money Assume now that nominal income doubles, while the price level, P, is unchanged. Households would double their nominal demand for money, Md. Since P is constant, the

11、 real demand for money, Md/P, also doubles.,Macroeconomics Chapter 10,15,The Demand for Money,Real GDP and the Demand for Money Economies of scale in cash management, at higher incomes households hold less money in proportion to their income.,Macroeconomics Chapter 10,16,The Demand for Money,Other I

12、nfluences on the Demand for Money Payments technology The level of transaction costs,Macroeconomics Chapter 10,17,The Demand for Money,The Money-Demand Function Md = P L(Y, i) Md/P = L( Y, i),Macroeconomics Chapter 10,18,The Demand for Money,Empirical Evidence on the Demand for Money Steven Goldfeld

13、 Casey Mulligan and Xavier Sala-i-Martin Michael Dotsey,Macroeconomics Chapter 10,19,Determination of the Price Level,The Nominal Quantity of Money Supplied Equals the Nominal Quantity Demanded Ms = Md Md = P L( Y, i) Key equation: Ms = P L( Y, i),Macroeconomics Chapter 10,20,Determination of the Pr

14、ice Level,General equilibrium. Ms = Md Ls = Ld (K)s = (K)d.,Macroeconomics Chapter 10,21,Determination of the Price Level,Macroeconomics Chapter 10,22,Determination of the Price Level,A Change in the Nominal Quantity of Money From a one-time change in the nominal quantity of money supplied,Ms. The i

15、ncrease in Ms from M to 2M raises the equilibrium price level from P to 2P,Macroeconomics Chapter 10,23,Determination of the Price Level,Macroeconomics Chapter 10,24,Determination of the Price Level,A Change in the Nominal Quantity of Money Since the technology level, A, has not changed, the real wa

16、ge rate, w/P, and labor input, L, do not change. Therefore, the price level, P, is twice as high, and w/P is unchanged. We conclude that, in general equilibrium, the nominal wage rate, w, has to double.,Macroeconomics Chapter 10,25,Determination of the Price Level,A Change in the Nominal Quantity of

17、 Money The unchanged technology level, A, means that the real rental price, R/P, and the quantity of capital services, K, do not change. The fixed K corresponds to a given capital stock, K, and an unchanged capital utilization rate, . Thus, the price level, P, is twice as high, and R/P is unchanged.

18、 We must have, in general equilibrium, that the nominal rental price, R, doubles.,Macroeconomics Chapter 10,26,Determination of the Price Level,A Change in the Nominal Quantity of Money i = (R/P) () . The doubling of Ms does not change the real rental price, R/P, and the capital utilization rate, , the ra