Tải bản đầy đủ - 0 (trang)
Figure 24.2 (Macro 11) The Interest Rate, Spending Balance, and Real GDP

Figure 24.2 (Macro 11) The Interest Rate, Spending Balance, and Real GDP

Tải bản đầy đủ - 0trang

STAGE II: Interest Rates and Inflation

• So far we have seen how real interest rates

affect real GDP.

• Now we want to study how inflation affects

interest rates.

• Real interest rate = nominal interest rates

minus expected inflation rate

• Note that it is the real interest rate that we

use to decide about our spending plans

Copyright â 2001 by H



17



Central Banks and Inflation

When inflation increases (declines), the Fed

raises (lowers) the nominal interest rates.

This is called the “policy rule”

• Higher inflation signals a rise in aggregate

expenditures. Central banks raise nominal

interest rates more than the inflation rate, so

that the real interest rate increases.

• Higher real interest rates lower AE and

slows down inflation

Copyright © 2001 by H



18



Figure 24.3

(Macro 11)

A Monetary Policy Rule



Copyright © 2001 by H



19



Monetary Policy Rule

• The monetary policy rule in Figure 24.3

shows that central banks raise the interest

rate when inflation rises and lower it when

inflation declines.

• The dashed line has a slope of 1. Monetary

policy rule has a bigger slope: Nominal

interest rate is increased by more than

inflation, so that the real interest changes.

• Note that AE decisions depend on “real”

rate.

Copyright © 2001 by H



20



Tài liệu bạn tìm kiếm đã sẵn sàng tải về

Figure 24.2 (Macro 11) The Interest Rate, Spending Balance, and Real GDP

Tải bản đầy đủ ngay(0 tr)

×