米貨幣銀行學(xué)課件師家升

1、Chapter 27Money and Inflation2Money and Inflation: The Evidence“Inflation is Always and Everywhere a Monetary Phenomenon” (M. Friedman)EvidenceIn every case when high for sustained period, M growth is highExamples:1. Latin American inflations2. German Hyperinflation, 19211923Controlled experiment, p

2、articularly after 1923 invasion of Ruhr government prints money to pay strikers, 1 million %Meaning of “inflation”Friedmans statement uses definition of as continuing, rapidly rising price level: Only then does evidence support it3German Hyperinflation: 1921234Response to Continually Rising MsMoneta

3、rist and Keynesian View1.M continually, shifts AD to right from AD1 to AD2 to AD3, etc.2.Y Yn, wages , AS shifts to left from AS1 to AS2 to AS3, etc.3.P continually rises from P1 to P2 to P3, etc.: i.e., have inflation5Monetarist and Keynesian Views of Monetarist ViewOnly source of AD shifts and in

4、Figure 2 can be Ms growthKeynesian ViewAllows for other sources of AD shifts, but comes to same conclusion that only source of sustained high is Ms growth1.Figure 3 shows that fiscal policy without Ms growth only causes P , but not sustained 2.Figure 4 shows that supply shock does not lead to sustai

5、ned 6Response to One-Shot Increase in GG permanently1.AD shifts right to AD22.Y Yn, AS shifts in to AS23.P to P2, but doesnt keep rising7Response to Supply ShockNegative Supply Shock1.AS shifts in to AS22.Y Yn, wages , AS shifts back to AS13.P unchanged, no 8Cost-Push InflationHigh Employment Target

6、 at Yn1.Workers raise wages because either: want higher real wages or e high2.AS shifts in3.Y Yn1.Y = Yn Yn, AS shifts in3.Y = Yn YT, government shifts AD out, and repeat steps 2 and 3, etc.4.P continually: i.e., get 10Budget Deficits and Government Budget Constraint DEF = G T = MB + B 1.Deficit fin

7、anced by bonds, no effect on MB and Ms 2.Deficit not financed by bonds, MB and Ms Financing persistent budget deficit by money creation leads to sustained 1.Deficit financed by Ms leads to AD shifts out, as in Fig 27.2 2.If deficit persists, Ms continually and get P continually, i.e., as in Fig 27.2

8、Conclusion: Deficit , only if it is 1.Persistent 2.Financed by money creation rather than by bonds11Budget Deficits and Budget deficits in other countries1.Bond finance hard2.Deficit likely to lead to money creation and Budget deficits in U.S.1.Large capital market, so can bond finance2.Fed has choi

9、ce whether to monetize deficit, but may be pressured to do so3.Ricardian equivalence may mean no effect of budget deficits on interest ratesConclusion: Deficits do not necessarily 12Budget Deficits and Interest Rates13Inflation and Money Growth1.Money and inflation relationship close until 19802.Aft

10、er 1980 relationship breaks down14Government Debt to GDP1.Debt/GDP falls 1960 19802.Deficits cant be source of money creation and 15Unemployment and the Natural Rate of UnemploymentHigh employment targets source of 1960-19801.U Yn2.U Un 1974-80 suggests cost-push 3.U Un and after 1980 result of Volc

11、ker deflation16Activist/Nonactivist DebateLags in Shifting AD 1.Data lag 2.Recognition lag 3.Legislative lag 4.Implementation lag 5.Effectiveness lagCase for Activist Policy:If self-correcting mechanism is slow, U Un for long time 1.Doing nothing has high cost 2.AS shift little, even after long lags

12、 in shifting ADConclusion: Should shift AD to AD2 to get to point 2 in Figure 11Case for Nonactivist PolicyIf self-correcting mechanism is fast 1.Doing nothing has low cost 2.AS shifts to AS2 before AD shifts to AD2 3.Sequence: 1, 1, 2, 2 in Figure 11 4.Undesirable effect: Y and P fluctuate17Activis

13、t/Nonactivist DebateCase for nonactivist policy stronger if expectations of policy matter 1.Economy wont stop at point 2 2.Wages , AS shifts in, Y Yn, AD shifted out, etc.: 3.Also less likely for wage push that gets us to 1Quite plausible that expectations of policy matter to wage settingRules vs Discretion 1.Nonactivists advocate policy rule to keep AD from fluctuating:Example: Monetarist constant-money-growth-rate-rule 2.Credibility of modating policy helps avoid wage push and helps pr