巴罗 宏观经济学

1 Inflation MoneyGrowth andInterestRates Chapter11 2 Cross CountryDataonInflationandMoneyGrowth Keyequation Ms P L Y i Twopossiblereasonsofinflation DecreaseofrealdemandformoneyIncreaseofmoneysupply 3 Cross CountryDataonInflationandMoneyGrowth Inflationratesandmoneygrowthratesfor82countriesfrom1960to2000 Wemeasurethepricelevel P bytheconsumerpriceindex CPI WeusetheCPI ratherthantheGDPdeflator becauseofdataavailability 4 5 6 7 Cross CountryDataonInflationandMoneyGrowth HighlightsTheinflationratewasgreaterthan0forallcountriesfrom1960to2000Thegrowthrateofnominalcurrencywasgreaterthan0forallcountriesfrom1960to2000 Thereisabroadcross sectionalrangefortheinflationratesandthegrowthratesofmoney 8 Cross CountryDataonInflationandMoneyGrowth HighlightsThemedianinflationratefrom1960to2000was8 3 peryear with30countriesexceeding10 Forthegrowthrateofnominalcurrency themedianwas11 6 peryear with50above10 9 Cross CountryDataonInflationandMoneyGrowth HighlightsInmostcountries thegrowthrateofnominalcurrency M exceededthegrowthrateofprices Foracountrythathasahighinflationrateinoneperiodtohaveahighinflationrateinanotherperiod Strongpositiveassociationbetweentheinflationrateandthegrowthrateofnominalcurrency 10 Cross CountryDataonInflationandMoneyGrowth 11 Cross CountryDataonInflationandMoneyGrowth Onelessonfromthecross countrydataisthat tounderstandinflation wehavetoincludemoneygrowthasacentralpartoftheanalysis MiltonFriedman sfamousdictum Inflationisalwaysandeverywhereamonetaryphenomenon 12 InflationandInterestRates ActualandExpectedInflationLet betheinflationrate Theinflationratefromyear1toyear2 1 istheratioofthechangeinthepriceleveltotheinitialpricelevel 1 P2 P1 P1 1 P1 P1 13 InflationandInterestRates ActualandExpectedInflation 1 P2 P1 P1 1 P1 P1 1 P1 P2 P1P2 1 1 P1 14 InflationandInterestRates ActualandExpectedInflationSincethefutureisunknown householdshavetoformforecastsorexpectationsofinflation Denoteby e1theexpectationoftheinflationrate 1 Theactualinflationrate 1 willusuallydeviatefromitsexpectation e1 andtheforecasterror orunexpectedinflation willbenonzero 15 InflationandInterestRates ActualandExpectedInflationHouseholdstrytokeeptheerrorsassmallaspossible Therefore theyuseavailableinformationonpastinflationandothervariablestoavoidsystematicmistakes Expectationsformedthiswayarecalledrationalexpectations 16 InflationandInterestRates RealandNominalInterestRatesThedollarvalueofassetsheldasbondsrisesovertheyearbythefactor1 i1 Theinterestratei1isthedollarornominalinterestratebecausei1determinesthechangeovertimeinthenominalvalueofassetsheldasbonds 17 InflationandInterestRates 18 InflationandInterestRates RealandNominalInterestRatesTheRealinterestratetobetherateatwhichtherealvalueofassetsheldasbondschangesovertime dollarassetsinyear2 dollarassetsinyear1 1 i1 P2 P1 1 1 19 InflationandInterestRates RealandNominalInterestRates dollarassetsinyear2 P2 dollarassetsinyear1 P1 1 i1 1 1 realassetsinyear2 realassetsinyear1 1 i1 1 1 20 InflationandInterestRates RealandNominalInterestRatesSincetherealinterestrate denotedbyr1 istherateatwhichassetsheldasbondschangeinrealvalue 1 r1 1 i1 1 1 21 InflationandInterestRates RealandNominalInterestRatesr1 i1 1 r1 1thecrossterm r1 1 whichtendstobesmall realinterestrate nominalinterestrate inflationrater1 i1 1 22 InflationandInterestRates FisherEquationi r FisherEffecti 23 InflationandInterestRates TheRealInterestRateandIntertemporalSubstitutionWhentheinflationrate isnotzero itistherealinterestrate r ratherthanthenominalrate i thatmattersforintertemporalsubstitution 24 InflationandInterestRates ActualandExpectedRealInterestRatesTheexpectedinflationratedeterminestheexpectedrealinterestrate retret it etexpectedrealinterestrate nominalinterestrate expectedinflationrate 25 InflationandInterestRates MeasuringexpectedinflationAskasampleofpeopleabouttheirexpectations Usethehypothesisofrationalexpectations whichsaysthatexpectationscorrespondtooptimalforecasts giventheavailableinformation Thenusestatisticaltechniquestogaugetheseoptimalforecasts Usemarketdatatoinferexpectationsofinflation 26 InflationandInterestRates MeasuringexpectedinflationLivingstonSurveyAskasampleofpeople 50economists abouttheirexpectations 27 InflationandInterestRates 28 InflationandInterestRates 29 InflationandInterestRates MeasuringexpectedinflationIndexedbonds realinterestrates andexpectedinflationratesIndexedgovernmentbonds whichadjustnominalpayoutsofinterestandprincipalforchangesinconsumer priceindexes Thesebondsguaranteetherealinterestrateoverthematurityofeachissue 30 InflationandInterestRates 31 InflationandInterestRates 32 InflationandInterestRates InterestRatesonMoneyrealinterestrateonmoney nominalinterestrateonmoney trealinterestrateonmoney t 33 InflationintheEquilibriumBusiness CycleModel GoalsToseehowinflationaffectsourconclusionsaboutthedeterminationofrealvariables includingrealGDP consumptionandinvestment quantitiesoflaborandcapitalservices therealwagerate andtherealrentalprice Tounderstandthecausesofinflation 34 InflationintheEquilibriumBusiness CycleModel Assumefullyanticipatedinflation sothattheinflationrate t equalstheexpectedrate et Extendtheequilibriumbusiness cyclemodeltoallowformoneygrowth 35 InflationintheEquilibriumBusiness CycleModel Assumethegovernmentprintsnewcurrencyandgivesittopeople Theyreceiveatransferpaymentfromthegovernment Thepaymentsarelump sumtransfers meaningthattheamountreceivedisindependentofhowmuchthehouseholdconsumesandworks howmuchmoneythehouseholdholds andsoon 36 InflationintheEquilibriumBusiness CycleModel Intertemporal SubstitutionEffectsTheexpectedrealinterestrate ret hasintertemporal substitutioneffectsonconsumptionandlaborsupply Therefore forgivenit achangein twillhavetheseintertemporal substitutioneffects 37 InflationintheEquilibriumBusiness CycleModel BondsandCapitali R P Replacethenominalinterestrateonbonds i bytherealrate r r R P 38 InflationintheEquilibriumBusiness CycleModel InterestRatesandtheDemandforMoneyThetradeoffbetweenearningassetsandholdingmoneyis i iTherefore thenominalinterestrate i stilldeterminesthecostofholdingmoneyratherthanearningassets WecanthereforestilldescriberealmoneydemandbythefunctionMd P L Y i 39 InflationintheEquilibriumBusiness CycleModel InterestRatesandtheDemandforMoneyItistherealinterestrate r thathasintertemporal substitutioneffectsonconsumptionandlaborsupply Itisthenominalinterest i thatinfluencestherealdemandformoney Md P 40 InflationintheEquilibriumBusiness CycleModel 41 InflationintheEquilibriumBusiness CycleModel 42 InflationintheEquilibriumBusiness CycleModel InflationandtheRealEconomyAchangeintheinflationrate doesnotshiftthedemandorsupplycurveforcapitalservices Therefore R P and K donotchange Achangeintheinflationrate doesnotshiftthedemandorsupplycurveforlabor Therefore w P andL donotchange 43 InflationintheEquilibriumBusiness CycleModel InflationandtheRealEconomyRealGDP Y isdeterminedbytheproductionfunctionY A F K L Weconcludethatachangein doesnotinfluencerealGDP Y 44 InflationintheEquilibriumBusiness CycleModel InflationandtheRealEconomyTherealrentalprice R P andthecapitalutilizationrate determinetherealrateofreturnfromowningcapital R P andthereforetherealinterestrate r r R P SinceR Pand areunchanged wefindthatachangeintheinflationrate doesnotaffecttherealinterestrate r 45 InflationintheEquilibriumBusiness CycleModel InflationandtheRealEconomyIfwecontinuetoignoreincomeeffectsfrominflation weknowthatCdoesnotchange SinceYisfixed weconcludethatIdoesnotchange 46 InflationintheEquilibriumBusiness CycleModel Wehavefoundthatthetimepathsofmoneygrowthandinflationdonotaffectagroupofrealvariables ThisgroupcomprisesrealGDP Y inputsoflaborandcapitalservices Land K consumptionandinvestment CandI therealwagerate w P therealrentalprice R P andtherealinterestrate r Theneutralityofmoneyapply asanapproximation totheentirepathofmoneygrowth 47 InflationintheEquilibriumBusiness CycleModel MoneyGrowth Inflation andtheNominalInterestRateAnalyzehowthetimepathofthenominalquantityofmoney Mt determinesthetimepathofthepricelevel Pt and hence theinflationrate t WealsoassumefornowthatYtandrtareconstantovertime 48 InflationintheEquilibriumBusiness CycleModel MoneyGrowth Inflation andtheNominalInterestRate Mt Mt 1 Mt t Mt MtMt 1 1 t Mt t Pt Pt t Pt 1 Pt PtPt 1 1 t Pt 49 InflationintheEquilibriumBusiness CycleModel MoneyGrowth Inflation andtheNominalInterestRateShowthatWhenMtgrowssteadilyattherate thepricelevel Pt willalsogrowsteadilyattherate 50 InflationintheEquilibriumBusiness CycleModel MoneyGrowth Inflation andtheNominalInterestRateTherealquantityofmoneydemanded L Y i doesnotvaryovertime realGDP Y isfixed i r i r Sinceweassumedthatrand arefixed iisunchanging SinceYandiarefixed wehaveverifiedthattherealquantityofmoneydemanded L Y i isunchanging 51 InflationintheEquilibriumBusiness CycleModel MoneyGrowth Inflation andtheNominalInterestRateThelevelofrealmoneydemanded L Y i equalstheunchanginglevelofrealmoneybalances Mt Pt L Y i andMt Ptarebothfixedovertime Therefore ifthelevelsofthetwovariablesareequalinthecurrentyear year1 theywillremainequalineveryfutureyear 52 InflationintheEquilibriumBusiness CycleModel MoneyGrowth Inflation andtheNominalInterestRateDeterminationofpricelevel P1 M1 L Y i t istheconstant 53 InflationintheEquilibriumBusiness CycleModel MoneyGrowth Inflation andtheNominalInterestRateTheinflationrate equalstheunchanginggrowthrateofmoney Realmoneybalances Mt Pt arefixedovertime Thenominalinterestrate i equalsr whereristheunchangingrealinterestrate 54 InflationintheEquilibriumBusiness CycleModel MoneyGrowth Inflation andtheNominalInterestRateTherealquantityofmoneydemanded L Y i isfixedovertime whereYistheunchangingrealGDP P1 M1 L Y i 55 InflationintheEquilibriumBusiness CycleModel ATrendintheRealDemandforMoneyAssumethatL Y i growssteadilyattheconstantrate Thisgrowthmightreflectlong termgrowthofrealGDP 56 InflationintheEquilibriumBusiness CycleModel ATrendintheRealDemandforMoneyRealmoneybalances Mt Pt increasebecauseofgrowthinthenumerator Mt attherate butdecreasebecauseofgrowthinthedenominator Pt attherate growthrateofMt Pt 57 InflationintheEquilibriumBusiness CycleModel ATrendintheRealDemandforMoneyIfL Y i growsatrate