11/6/2013. Chapter 14: Dynamic AD-AS. Introduction. Introduction. Keeping track of time. The model s elements

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "11/6/2013. Chapter 14: Dynamic AD-AS. Introduction. Introduction. Keeping track of time. The model s elements"

Transcription

1 Inroducion Chaper 14: Dynamic D-S dynamic model of aggregae and aggregae supply gives us more insigh ino how he economy works in he shor run. I is a simplified version of a DSGE model, used in cuing-edge macroeconomic research. DSGE = Dynamic, Sochasic, General Equilibrium) 0 1 Inroducion dynamic model of aggregae and aggregae supply is buil from familiar conceps, such as: he IS curve, which negaively relaes he real ineres rae and for goods & services he Phillips curve, which relaes inflaion o he gap beween oupu and is naural level, expeced inflaion, and supply shocks adapive expecaions, a simple model of inflaion expecaions How he dynamic D-S model is differen from he sandard model Insead of fixing he money supply, he cenral bank follows a moneary policy rule ha adjuss ineres raes when oupu or inflaion change. verical axis of he DD-DS diagram measures he inflaion rae, no he price level. Subsequen ime periods are linked ogeher: Changes in inflaion in one period aler expecaions of fuure inflaion, which changes aggregae supply in fuure periods, which furher alers inflaion and inflaion expecaions. 3 Keeping rack of ime model s elemens subscrip denoes he ime period, e.g. = real GDP in period -1 = real GDP in period 1 +1 = real GDP in period + 1 We can hink of ime periods as years. E.g., if = 008, hen = 008 = real GDP in = 007 = real GDP in = 009 = real GDP in 009 model has five equaions and five endogenous variables: oupu, inflaion, he real ineres rae, he ineres rae, and expeced inflaion. equaions may use differen noaion, bu hey are concepually similar o hings you ve already learned. firs equaion is for oupu 4 5 1

2 Oupu: Demand for Goods and Services r ) Oupu: Demand for Goods and Services r ) oupu naural level of real ineres 0, 0 oupu rae Negaive relaion beween oupu and ineres rae, same inuiion as IS curve. measures he ineres-rae sensiiviy of naural rae of ineres in absence of shocks, when r shock, random and zero on average 6 7 ex ane i.e. expeced) real ineres rae 1 E 1 Real Ineres Rae: Fisher Equaion r i E 1 ineres rae expeced inflaion rae increase in price level from period o +1, no known in period expecaion, formed in period, of inflaion from o +1 curren inflaion Inflaion: Phillips Curve E 1 ) previously expeced inflaion 0 indicaes how much inflaion responds when oupu flucuaes around is naural level supply shock, random and zero on average 8 9 Expeced Inflaion: dapive Expecaions E 1 Nominal Ineres Rae: Moneary-Policy Rule i ) ) For simpliciy, we assume people expec prices o coninue rising a he curren inflaion rae. ineres rae, se each period by he cenral bank naural rae of ineres cenral bank s inflaion arge 0,

3 Nominal Ineres Rae: Moneary-Policy Rule i ) ) measures how much he cenral bank adjuss he ineres rae when inflaion deviaes from is arge measures how much he cenral bank adjuss he ineres rae when oupu deviaes from is naural rae 1 CSE STUD Taylor Rule Economis John Taylor proposed a moneary policy rule very similar o ours: i ff = ) 0.5GDP gap) where i ff = federal funds rae arge GDP gap = 100 x = percen by which real GDP is below is naural rae Taylor Rule maches Fed policy fairly well. 13 Percen n CSE STUD Taylor Rule acual Federal Funds rae Taylor s rule model s variables and parameers Endogenous variables: r i E 1 Oupu Inflaion Real ineres rae Nominal ineres rae Expeced inflaion model s variables and parameers model s variables and parameers Exogenous variables: Naural level of oupu Cenral bank s arge inflaion rae Demand shock Supply shock Predeermined variable: Previous period s inflaion 1 Parameers: Responsiveness of o he real ineres rae Naural rae of ineres Responsiveness of inflaion o oupu in he Phillips Curve Responsiveness of i o inflaion in he moneary-policy rule Responsiveness of i o oupu in he moneary-policy rule

4 model s long-run equilibrium normal sae around which he economy flucuaes. Two condiions required for long-run equilibrium: re are no shocks: 0 Inflaion is consan: 1 model s long-run equilibrium Plugging he preceding condiions ino he model s five equaions and using algebra yields hese long-run values: r 1 E i Dynamic ggregae Supply Curve DS curve shows a relaion beween oupu and inflaion ha comes from he Phillips Curve and dapive Expecaions: 1 DS) 1 ) Dynamic ggregae Supply Curve 1 ) DS slopes upward: high levels of oupu DS are associaed wih high inflaion. DS shifs in response o changes in he naural level of oupu, previous inflaion, and supply shocks. 0 1 Dynamic ggregae Demand Curve To derive he DD curve, we will combine four equaions and hen eliminae all he endogenous variables oher han oupu and inflaion. Sar wih he for goods and services: r ) i E ) 1 using he Fisher eq n Dynamic ggregae Demand Curve resul from previous slide i E ) 1 using he expecaions eq n i ) using moneary policy rule [ ) ) ] [ ) )] 3 4

5 Dynamic ggregae Demand Curve resul from previous slide [ ) )] combine like erms, solve for ) B, where 1 0, B DD) Dynamic ggregae Demand Curve ) B DD slopes downward: When inflaion rises, he cenral bank raises he real ineres rae, reducing he for goods & services. DD shifs in response o changes in he naural level of oupu, DD he inflaion arge, and shocks. 4 5 shor-run equilibrium Long-run growh DD DS In each period, he inersecion of DD and DS deermines he shor-run eq m values of inflaion and oupu. In he eq m shown here a, oupu is below is naural level. +1 Period DS : shifs iniial because eq m a economy can DS produce more DS +1 g&s Period + 1 : B New Long-run eq m a B, = DD shifs income growh grows because bu increases inflaion he higher income remains naural sable. rae raises of oupu. DD DD +1 for g&s shock o aggregae supply Parameer values for simulaions + 1 B C D + 1 DD DS DS +1 DS + DS -1 Period : + 1: 1 : : Supply s iniial inflaion eq m shock falls, a is inflaion ν over > 0) ν shifs = 0) bu expecaions DS DS upward; does fall, no reurn DS inflaion moves o is rises, iniial posiion downward, cenral bank due o higher oupu responds inflaion rises. by expecaions. This raising process real coninues ineres rae, unil oupu reurns falls. o is naural rae. LR eq m a Thus, we can inerpre as he percenage deviaion of Cenral bank s inflaion oupu from is naural level. arge 1-percenage-poin following is percen. graphs are increase called impulse in he real response ineres rae funcions. reduces y oupu by 1 percen of response naural show he rae of ineres of is he is naural level. percen. endogenous variables o When oupu is 1 percen he impulse, i.e. he shock. above is naural level, inflaion rises by 0.5 percenage poin. se values are from he Taylor Rule, which approximaes he acual behavior of he Federal Reserve

6 dynamic response o a supply shock dynamic response o a supply shock oneperiod supply shock affecs oupu for many periods. Because inflaion expecaions adjus slowly, l acual inflaion remains high for many periods. dynamic response o a supply shock dynamic response o a supply shock r real ineres rae akes many periods o reurn o is naural rae. i behavior of he ineres rae depends on ha of he inflaion and real ineres raes. shock o aggregae DS +5 DS +4 DS +3 F G DS E D DS + 1 C B DS -1, 1 DD,+1,,+4 DD -1, Periods : + 1: + 1 5: 6 : Higher DS and iniial o Posiive + higher: is 4 eq m inflaion : in due DS Higher raised o gradually higher inflaion shock expecaions inflaion shifs ε previous > 0) down shifs in as for preceding inflaion period D + o 1, he raises and period, righ; shifing bu inflaion oupu ao inflaion DS rise. up. Inflaion shock expecaions, ends rises and fall, more, DD economy shifs reurns oupu DS up. falls. o is gradually Inflaion iniial posiion. rises, Eq m recovers oupu a falls. G. unil reaching LR eq m a. 34 dynamic response o a shock shock raises oupu for five periods. When he shock ends, oupu falls below is naural level, and recovers gradually. 6

7 dynamic response o a shock shock causes inflaion o rise. When he shock ends, inflaion gradually falls oward is iniial level. dynamic response o a shock shock raises he real ineres rae. fer he shock ends, he real ineres r rae falls and approaches is iniial level. dynamic response o a shock shif in moneary policy i behavior of he ineres rae depends on ha of he inflaion and real ineres raes. 1 = % final = 1% B C Z DS -1, DS +1 DD, +1, DS final DD 1 Period Subsequen 1: : + 1 : arge periods: Cenral fall inflaion bank rae reduced This lowers process = arge %, iniial inflaion coninues o eq m = 1%, a unil expecaions oupu raises reurns real for o ineres is + naural 1,, rae, shifing rae shifs and DD DS downward. inflaion lefward. Oupu reaches rises, and is new inflaion arge. falls. fall. 1, final 39 dynamic response o a reducion in arge inflaion dynamic response o a reducion in arge inflaion Reducing he arge inflaion rae causes oupu o fall below is naural level for a while. Oupu recovers gradually. Because expecaions adjus slowly, i akes many periods for inflaion o reach he new arge. 7

8 dynamic response o a reducion in arge inflaion r To reduce inflaion, he cenral bank raises he real ineres rae o reduce aggregae. real ineres rae gradually reurns o is naural rae. dynamic response o a reducion in arge inflaion i iniial increase in he real ineres rae raises he ineres rae. s he inflaion and real ineres raes fall, he rae falls. Oupu variabiliy vs. inflaion variabiliy supply shock reduces oupu bad) and raises inflaion also bad). cenral bank faces a radeoff beween hese bads i can reduce he effec on oupu, bu only by oleraing i an increase in he effec on inflaion. 44 Oupu variabiliy vs. inflaion variabiliy 1 CSE 1: θ is large, θ is small supply shock In his case, a shifs DS up. small change in DS inflaion has a large effec on DS 1 oupu, so DD is relaively fla. 1 DD 1, shock has a large effec on oupu, bu a small effec on inflaion. 45 Oupu variabiliy vs. inflaion variabiliy 1 CSE : θ is small, θ is large 1 DS DD 1, DS 1 In his case, a large change in inflaion has only a small effec on oupu, so DD is relaively seep. Now, he shock has only a small effec on oupu, bu a big effec on inflaion. 46 Taylor Principle Taylor Principle named afer John Taylor): proposiion ha a cenral bank should respond o an increase in inflaion wih an even greaer increase in he ineres rae so ha he real ineres rae rises). I.e., cenral bank should se θ > 0. Oherwise, DD will slope upward, economy may be unsable, and inflaion may spiral ou of conrol. 47 8

9 Taylor Principle 1 ) 1 1 ) ) DD) i MP rule) Taylor Principle 1 ) 1 1 ) ) DD) i MP rule) If θ > 0: When inflaion rises, he cenral bank increases he ineres rae even more, which increases he real ineres rae and reduces he for goods & services. DD has a negaive slope. 48 If θ < 0: When inflaion rises, he cenral bank increases he ineres rae by a smaller amoun. real ineres rae falls, which increases he for goods & services. DD has a posiive slope. 49 Taylor Principle If DD is upward-sloping and seeper han DS, hen he economy is unsable: oupu will no reurn o is naural level, and inflaion will spiral upward for posiive shocks) or downward for negaive ones). Esimaes of θ from published research: θ = 0.14 from , before Paul Volcker became Fed chairman. Inflaion was high during his ime, especially during he 1970s. θ = 0.7 during he Volcker and Greenspan years. Inflaion was much lower during hese years. 50 Chaper Summary DD-DS model combines five relaionships: an IS-curve-like equaion of he goods marke, he Fisher equaion, a Phillips curve equaion, an equaion for expeced inflaion, and a moneary policy rule. long-run equilibrium of he model is classical. Oupu and he real ineres rae are a heir naural levels, independen of moneary policy. cenral bank s inflaion arge deermines inflaion, expeced inflaion, and he ineres rae. Chaper Summary DD-DS model can be used o deermine he immediae impac of any shock on he economy, and can be used o race ou he effecs of he shock over ime. parameers of he moneary policy rule influence he slope of he DS curve, so hey deermine wheher a supply shock has a greaer effec on oupu or inflaion. Thus, he cenral bank faces a radeoff beween oupu variabiliy and inflaion variabiliy. Chaper Summary DD-DS model assumes ha he Taylor Principle holds, i.e. ha he cenral bank responds o an increase in inflaion by raising he real ineres rae. Oherwise, he economy may become unsable and inflaion may spiral ou of conrol. 9

Chapter 14: A Dynamic Model of Aggregate Supply and Demand*

Chapter 14: A Dynamic Model of Aggregate Supply and Demand* Chapter 14: A Dynamic Model of Aggregate Supply and Demand* MACROECONOMICS Seventh Edition N. Gregory Mankiw * Slides based on Ron Cronovich's slides, adjusted for course in Macroeconomics for International

More information

INVESTIGATION OF THE INFLUENCE OF UNEMPLOYMENT ON ECONOMIC INDICATORS

INVESTIGATION OF THE INFLUENCE OF UNEMPLOYMENT ON ECONOMIC INDICATORS INVESTIGATION OF THE INFLUENCE OF UNEMPLOYMENT ON ECONOMIC INDICATORS Ilona Tregub, Olga Filina, Irina Kondakova Financial Universiy under he Governmen of he Russian Federaion 1. Phillips curve In economics,

More information

Phillips Curve. Macroeconomics Cunningham

Phillips Curve. Macroeconomics Cunningham Phillips Curve Macroeconomics Cunningham Original Phillips Curve A. W. Phillips (1958), The Relaion Beween Unemploymen and he Rae of Change of Money Wage Raes in he Unied Kingdom, 1861-1957, Economica.

More information

4. International Parity Conditions

4. International Parity Conditions 4. Inernaional ariy ondiions 4.1 urchasing ower ariy he urchasing ower ariy ( heory is one of he early heories of exchange rae deerminaion. his heory is based on he concep ha he demand for a counry's currency

More information

Graduate Macro Theory II: Notes on Neoclassical Growth Model

Graduate Macro Theory II: Notes on Neoclassical Growth Model Graduae Macro Theory II: Noes on Neoclassical Growh Model Eric Sims Universiy of Nore Dame Spring 2011 1 Basic Neoclassical Growh Model The economy is populaed by a large number of infiniely lived agens.

More information

Chapter 7. Response of First-Order RL and RC Circuits

Chapter 7. Response of First-Order RL and RC Circuits Chaper 7. esponse of Firs-Order L and C Circuis 7.1. The Naural esponse of an L Circui 7.2. The Naural esponse of an C Circui 7.3. The ep esponse of L and C Circuis 7.4. A General oluion for ep and Naural

More information

A Note on Using the Svensson procedure to estimate the risk free rate in corporate valuation

A Note on Using the Svensson procedure to estimate the risk free rate in corporate valuation A Noe on Using he Svensson procedure o esimae he risk free rae in corporae valuaion By Sven Arnold, Alexander Lahmann and Bernhard Schwezler Ocober 2011 1. The risk free ineres rae in corporae valuaion

More information

A Brief Introduction to the Consumption Based Asset Pricing Model (CCAPM)

A Brief Introduction to the Consumption Based Asset Pricing Model (CCAPM) A Brief Inroducion o he Consumpion Based Asse Pricing Model (CCAPM We have seen ha CAPM idenifies he risk of any securiy as he covariance beween he securiy's rae of reurn and he rae of reurn on he marke

More information

YTM is positively related to default risk. YTM is positively related to liquidity risk. YTM is negatively related to special tax treatment.

YTM is positively related to default risk. YTM is positively related to liquidity risk. YTM is negatively related to special tax treatment. . Two quesions for oday. A. Why do bonds wih he same ime o mauriy have differen YTM s? B. Why do bonds wih differen imes o mauriy have differen YTM s? 2. To answer he firs quesion les look a he risk srucure

More information

Vector Autoregressions (VARs): Operational Perspectives

Vector Autoregressions (VARs): Operational Perspectives Vecor Auoregressions (VARs): Operaional Perspecives Primary Source: Sock, James H., and Mark W. Wason, Vecor Auoregressions, Journal of Economic Perspecives, Vol. 15 No. 4 (Fall 2001), 101-115. Macroeconomericians

More information

CHARGE AND DISCHARGE OF A CAPACITOR

CHARGE AND DISCHARGE OF A CAPACITOR REFERENCES RC Circuis: Elecrical Insrumens: Mos Inroducory Physics exs (e.g. A. Halliday and Resnick, Physics ; M. Sernheim and J. Kane, General Physics.) This Laboraory Manual: Commonly Used Insrumens:

More information

1. The graph shows the variation with time t of the velocity v of an object.

1. The graph shows the variation with time t of the velocity v of an object. 1. he graph shows he variaion wih ime of he velociy v of an objec. v Which one of he following graphs bes represens he variaion wih ime of he acceleraion a of he objec? A. a B. a C. a D. a 2. A ball, iniially

More information

Impact of Debt on Primary Deficit and GSDP Gap in Odisha: Empirical Evidences

Impact of Debt on Primary Deficit and GSDP Gap in Odisha: Empirical Evidences S.R. No. 002 10/2015/CEFT Impac of Deb on Primary Defici and GSDP Gap in Odisha: Empirical Evidences 1. Inroducion The excessive pressure of public expendiure over is revenue receip is financed hrough

More information

Economics Honors Exam 2008 Solutions Question 5

Economics Honors Exam 2008 Solutions Question 5 Economics Honors Exam 2008 Soluions Quesion 5 (a) (2 poins) Oupu can be decomposed as Y = C + I + G. And we can solve for i by subsiuing in equaions given in he quesion, Y = C + I + G = c 0 + c Y D + I

More information

Chapter 2 Problems. s = d t up. = 40km / hr d t down. 60km / hr. d t total. + t down. = t up. = 40km / hr + d. 60km / hr + 40km / hr

Chapter 2 Problems. s = d t up. = 40km / hr d t down. 60km / hr. d t total. + t down. = t up. = 40km / hr + d. 60km / hr + 40km / hr Chaper 2 Problems 2.2 A car ravels up a hill a a consan speed of 40km/h and reurns down he hill a a consan speed of 60 km/h. Calculae he average speed for he rip. This problem is a bi more suble han i

More information

4.8 Exponential Growth and Decay; Newton s Law; Logistic Growth and Decay

4.8 Exponential Growth and Decay; Newton s Law; Logistic Growth and Decay 324 CHAPTER 4 Exponenial and Logarihmic Funcions 4.8 Exponenial Growh and Decay; Newon s Law; Logisic Growh and Decay OBJECTIVES 1 Find Equaions of Populaions Tha Obey he Law of Uninhibied Growh 2 Find

More information

SPECIAL REPORT May 4, Shifting Drivers of Inflation Canada versus the U.S.

SPECIAL REPORT May 4, Shifting Drivers of Inflation Canada versus the U.S. Paul Ferley Assisan Chief Economis 416-974-7231 paul.ferley@rbc.com Nahan Janzen Economis 416-974-0579 nahan.janzen@rbc.com SPECIAL REPORT May 4, 2010 Shifing Drivers of Inflaion Canada versus he U.S.

More information

Chabot College Physics Lab RC Circuits Scott Hildreth

Chabot College Physics Lab RC Circuits Scott Hildreth Chabo College Physics Lab Circuis Sco Hildreh Goals: Coninue o advance your undersanding of circuis, measuring resisances, currens, and volages across muliple componens. Exend your skills in making breadboard

More information

Cointegration: The Engle and Granger approach

Cointegration: The Engle and Granger approach Coinegraion: The Engle and Granger approach Inroducion Generally one would find mos of he economic variables o be non-saionary I(1) variables. Hence, any equilibrium heories ha involve hese variables require

More information

Chapter 8: Regression with Lagged Explanatory Variables

Chapter 8: Regression with Lagged Explanatory Variables Chaper 8: Regression wih Lagged Explanaory Variables Time series daa: Y for =1,..,T End goal: Regression model relaing a dependen variable o explanaory variables. Wih ime series new issues arise: 1. One

More information

Basic Assumption: population dynamics of a group controlled by two functions of time

Basic Assumption: population dynamics of a group controlled by two functions of time opulaion Models Basic Assumpion: populaion dynamics of a group conrolled by wo funcions of ime Birh Rae β(, ) = average number of birhs per group member, per uni ime Deah Rae δ(, ) = average number of

More information

I. Basic Concepts (Ch. 1-4)

I. Basic Concepts (Ch. 1-4) (Ch. 1-4) A. Real vs. Financial Asses (Ch 1.2) Real asses (buildings, machinery, ec.) appear on he asse side of he balance shee. Financial asses (bonds, socks) appear on boh sides of he balance shee. Creaing

More information

Chapter 6: Business Valuation (Income Approach)

Chapter 6: Business Valuation (Income Approach) Chaper 6: Business Valuaion (Income Approach) Cash flow deerminaion is one of he mos criical elemens o a business valuaion. Everyhing may be secondary. If cash flow is high, hen he value is high; if he

More information

Duration and Convexity ( ) 20 = Bond B has a maturity of 5 years and also has a required rate of return of 10%. Its price is $613.

Duration and Convexity ( ) 20 = Bond B has a maturity of 5 years and also has a required rate of return of 10%. Its price is $613. Graduae School of Business Adminisraion Universiy of Virginia UVA-F-38 Duraion and Convexiy he price of a bond is a funcion of he promised paymens and he marke required rae of reurn. Since he promised

More information

Circuit Types. () i( t) ( )

Circuit Types. () i( t) ( ) Circui Types DC Circuis Idenifying feaures: o Consan inpus: he volages of independen volage sources and currens of independen curren sources are all consan. o The circui does no conain any swiches. All

More information

Wages and Unemployment. 1. Pre-Keynesian economics. Equilibrium in all markets, FE of labor in labor market equilibrium. 2. Keynes' revolution

Wages and Unemployment. 1. Pre-Keynesian economics. Equilibrium in all markets, FE of labor in labor market equilibrium. 2. Keynes' revolution Wages and Unemploymen 1. Pre-Keynesian economics Equilibrium in all markes, FE of labor in labor marke equilibrium 2. Keynes' revoluion 3. Inflaion His ideas developed in he hisorical conex of pos-wwi

More information

Chapter 2 Kinematics in One Dimension

Chapter 2 Kinematics in One Dimension Chaper Kinemaics in One Dimension Chaper DESCRIBING MOTION:KINEMATICS IN ONE DIMENSION PREVIEW Kinemaics is he sudy of how hings moe how far (disance and displacemen), how fas (speed and elociy), and how

More information

A Mathematical Description of MOSFET Behavior

A Mathematical Description of MOSFET Behavior 10/19/004 A Mahemaical Descripion of MOSFET Behavior.doc 1/8 A Mahemaical Descripion of MOSFET Behavior Q: We ve learned an awful lo abou enhancemen MOSFETs, bu we sill have ye o esablished a mahemaical

More information

The Greek financial crisis: growing imbalances and sovereign spreads. Heather D. Gibson, Stephan G. Hall and George S. Tavlas

The Greek financial crisis: growing imbalances and sovereign spreads. Heather D. Gibson, Stephan G. Hall and George S. Tavlas The Greek financial crisis: growing imbalances and sovereign spreads Heaher D. Gibson, Sephan G. Hall and George S. Tavlas The enry The enry of Greece ino he Eurozone in 2001 produced a dividend in he

More information

Two Compartment Body Model and V d Terms by Jeff Stark

Two Compartment Body Model and V d Terms by Jeff Stark Two Comparmen Body Model and V d Terms by Jeff Sark In a one-comparmen model, we make wo imporan assumpions: (1) Linear pharmacokineics - By his, we mean ha eliminaion is firs order and ha pharmacokineic

More information

Relative velocity in one dimension

Relative velocity in one dimension Connexions module: m13618 1 Relaive velociy in one dimension Sunil Kumar Singh This work is produced by The Connexions Projec and licensed under he Creaive Commons Aribuion License Absrac All quaniies

More information

MACROECONOMIC FORECASTS AT THE MOF A LOOK INTO THE REAR VIEW MIRROR

MACROECONOMIC FORECASTS AT THE MOF A LOOK INTO THE REAR VIEW MIRROR MACROECONOMIC FORECASTS AT THE MOF A LOOK INTO THE REAR VIEW MIRROR The firs experimenal publicaion, which summarised pas and expeced fuure developmen of basic economic indicaors, was published by he Minisry

More information

New Classical Economics. Graduate Macroeconomics I ECON 309 Cunningham

New Classical Economics. Graduate Macroeconomics I ECON 309 Cunningham New Classical Economics Graduae Macroeconomics I ECON 309 Cunningham New Classical Economics 1. Acceps model of GE wih no imperfecions. 2. Prices are perfecly flexible, and all markes are permanenly cleared

More information

Mathematics in Pharmacokinetics What and Why (A second attempt to make it clearer)

Mathematics in Pharmacokinetics What and Why (A second attempt to make it clearer) Mahemaics in Pharmacokineics Wha and Why (A second aemp o make i clearer) We have used equaions for concenraion () as a funcion of ime (). We will coninue o use hese equaions since he plasma concenraions

More information

1. Explain why the theory of purchasing power parity is often referred to as the law of one price.

1. Explain why the theory of purchasing power parity is often referred to as the law of one price. Chaper Review Quesions. xplain why he heory of purchasing power pariy is ofen referred o as he law of one price. urchasing ower ariy () is referred o as he law of one price because he deerminaion of he

More information

RC, RL and RLC circuits

RC, RL and RLC circuits Name Dae Time o Complee h m Parner Course/ Secion / Grade RC, RL and RLC circuis Inroducion In his experimen we will invesigae he behavior of circuis conaining combinaions of resisors, capaciors, and inducors.

More information

cooking trajectory boiling water B (t) microwave 0 2 4 6 8 101214161820 time t (mins)

cooking trajectory boiling water B (t) microwave 0 2 4 6 8 101214161820 time t (mins) Alligaor egg wih calculus We have a large alligaor egg jus ou of he fridge (1 ) which we need o hea o 9. Now here are wo accepable mehods for heaing alligaor eggs, one is o immerse hem in boiling waer

More information

Optimal Investment and Consumption Decision of Family with Life Insurance

Optimal Investment and Consumption Decision of Family with Life Insurance Opimal Invesmen and Consumpion Decision of Family wih Life Insurance Minsuk Kwak 1 2 Yong Hyun Shin 3 U Jin Choi 4 6h World Congress of he Bachelier Finance Sociey Torono, Canada June 25, 2010 1 Speaker

More information

Chapter 9 Bond Prices and Yield

Chapter 9 Bond Prices and Yield Chaper 9 Bond Prices and Yield Deb Classes: Paymen ype A securiy obligaing issuer o pay ineress and principal o he holder on specified daes, Coupon rae or ineres rae, e.g. 4%, 5 3/4%, ec. Face, par value

More information

Answer, Key Homework 2 David McIntyre 45123 Mar 25, 2004 1

Answer, Key Homework 2 David McIntyre 45123 Mar 25, 2004 1 Answer, Key Homework 2 Daid McInyre 4123 Mar 2, 2004 1 This prin-ou should hae 1 quesions. Muliple-choice quesions may coninue on he ne column or page find all choices before making your selecion. The

More information

Chapter 4: Exponential and Logarithmic Functions

Chapter 4: Exponential and Logarithmic Functions Chaper 4: Eponenial and Logarihmic Funcions Secion 4.1 Eponenial Funcions... 15 Secion 4. Graphs of Eponenial Funcions... 3 Secion 4.3 Logarihmic Funcions... 4 Secion 4.4 Logarihmic Properies... 53 Secion

More information

The Optimal Instrument Rule of Indonesian Monetary Policy

The Optimal Instrument Rule of Indonesian Monetary Policy The Opimal Insrumen Rule of Indonesian Moneary Policy Dr. Muliadi Widjaja Dr. Eugenia Mardanugraha Absrac Since 999, according o Law No. 3/999, Bank Indonesia (BI- he Indonesian Cenral Bank) se inflaion

More information

9. Capacitor and Resistor Circuits

9. Capacitor and Resistor Circuits ElecronicsLab9.nb 1 9. Capacior and Resisor Circuis Inroducion hus far we have consider resisors in various combinaions wih a power supply or baery which provide a consan volage source or direc curren

More information

State Machines: Brief Introduction to Sequencers Prof. Andrew J. Mason, Michigan State University

State Machines: Brief Introduction to Sequencers Prof. Andrew J. Mason, Michigan State University Inroducion ae Machines: Brief Inroducion o equencers Prof. Andrew J. Mason, Michigan ae Universiy A sae machine models behavior defined by a finie number of saes (unique configuraions), ransiions beween

More information

The Transport Equation

The Transport Equation The Transpor Equaion Consider a fluid, flowing wih velociy, V, in a hin sraigh ube whose cross secion will be denoed by A. Suppose he fluid conains a conaminan whose concenraion a posiion a ime will be

More information

DYNAMIC MODELS FOR VALUATION OF WRONGFUL DEATH PAYMENTS

DYNAMIC MODELS FOR VALUATION OF WRONGFUL DEATH PAYMENTS DYNAMIC MODELS FOR VALUATION OF WRONGFUL DEATH PAYMENTS Hong Mao, Shanghai Second Polyechnic Universiy Krzyszof M. Osaszewski, Illinois Sae Universiy Youyu Zhang, Fudan Universiy ABSTRACT Liigaion, exper

More information

MACROECONOMIC POLICY POLICY REACTION FUNCTIONS: INFLATION FORECAST TARGETING AND TAYLOR RULES

MACROECONOMIC POLICY POLICY REACTION FUNCTIONS: INFLATION FORECAST TARGETING AND TAYLOR RULES EC307 EPUK - Macroeconomic Policy ECONOMIC POLICY IN THE UK MACROECONOMIC POLICY POLICY REACTION FUNCTIONS: INFLATION FORECAST TARGETING AND TAYLOR RULES Summary We compare inflaion forecas argeing wih

More information

Graphing the Von Bertalanffy Growth Equation

Graphing the Von Bertalanffy Growth Equation file: d:\b173-2013\von_beralanffy.wpd dae: Sepember 23, 2013 Inroducion Graphing he Von Beralanffy Growh Equaion Previously, we calculaed regressions of TL on SL for fish size daa and ploed he daa and

More information

II.1. Debt reduction and fiscal multipliers. dbt da dpbal da dg. bal

II.1. Debt reduction and fiscal multipliers. dbt da dpbal da dg. bal Quarerly Repor on he Euro Area 3/202 II.. Deb reducion and fiscal mulipliers The deerioraion of public finances in he firs years of he crisis has led mos Member Saes o adop sizeable consolidaion packages.

More information

RC (Resistor-Capacitor) Circuits. AP Physics C

RC (Resistor-Capacitor) Circuits. AP Physics C (Resisor-Capacior Circuis AP Physics C Circui Iniial Condiions An circui is one where you have a capacior and resisor in he same circui. Suppose we have he following circui: Iniially, he capacior is UNCHARGED

More information

Part 1: White Noise and Moving Average Models

Part 1: White Noise and Moving Average Models Chaper 3: Forecasing From Time Series Models Par 1: Whie Noise and Moving Average Models Saionariy In his chaper, we sudy models for saionary ime series. A ime series is saionary if is underlying saisical

More information

Rotational Inertia of a Point Mass

Rotational Inertia of a Point Mass Roaional Ineria of a Poin Mass Saddleback College Physics Deparmen, adaped from PASCO Scienific PURPOSE The purpose of his experimen is o find he roaional ineria of a poin experimenally and o verify ha

More information

Journal Of Business & Economics Research September 2005 Volume 3, Number 9

Journal Of Business & Economics Research September 2005 Volume 3, Number 9 Opion Pricing And Mone Carlo Simulaions George M. Jabbour, (Email: jabbour@gwu.edu), George Washingon Universiy Yi-Kang Liu, (yikang@gwu.edu), George Washingon Universiy ABSTRACT The advanage of Mone Carlo

More information

Chapter 8 Student Lecture Notes 8-1

Chapter 8 Student Lecture Notes 8-1 Chaper Suden Lecure Noes - Chaper Goals QM: Business Saisics Chaper Analyzing and Forecasing -Series Daa Afer compleing his chaper, you should be able o: Idenify he componens presen in a ime series Develop

More information

Revisions to Nonfarm Payroll Employment: 1964 to 2011

Revisions to Nonfarm Payroll Employment: 1964 to 2011 Revisions o Nonfarm Payroll Employmen: 1964 o 2011 Tom Sark December 2011 Summary Over recen monhs, he Bureau of Labor Saisics (BLS) has revised upward is iniial esimaes of he monhly change in nonfarm

More information

Understanding Sequential Circuit Timing

Understanding Sequential Circuit Timing ENGIN112: Inroducion o Elecrical and Compuer Engineering Fall 2003 Prof. Russell Tessier Undersanding Sequenial Circui Timing Perhaps he wo mos disinguishing characerisics of a compuer are is processor

More information

Chapter 4. Properties of the Least Squares Estimators. Assumptions of the Simple Linear Regression Model. SR3. var(e t ) = σ 2 = var(y t )

Chapter 4. Properties of the Least Squares Estimators. Assumptions of the Simple Linear Regression Model. SR3. var(e t ) = σ 2 = var(y t ) Chaper 4 Properies of he Leas Squares Esimaors Assumpions of he Simple Linear Regression Model SR1. SR. y = β 1 + β x + e E(e ) = 0 E[y ] = β 1 + β x SR3. var(e ) = σ = var(y ) SR4. cov(e i, e j ) = cov(y

More information

Analysis of tax effects on consolidated household/government debts of a nation in a monetary union under classical dichotomy

Analysis of tax effects on consolidated household/government debts of a nation in a monetary union under classical dichotomy MPRA Munich Personal RePEc Archive Analysis of ax effecs on consolidaed household/governmen debs of a naion in a moneary union under classical dichoomy Minseong Kim 8 April 016 Online a hps://mpra.ub.uni-muenchen.de/71016/

More information

Fifth Quantitative Impact Study of Solvency II (QIS 5) National guidance on valuation of technical provisions for German SLT health insurance

Fifth Quantitative Impact Study of Solvency II (QIS 5) National guidance on valuation of technical provisions for German SLT health insurance Fifh Quaniaive Impac Sudy of Solvency II (QIS 5) Naional guidance on valuaion of echnical provisions for German SLT healh insurance Conens 1 Inroducion... 2 2 Calculaion of bes-esimae provisions... 3 2.1

More information

Risk Modelling of Collateralised Lending

Risk Modelling of Collateralised Lending Risk Modelling of Collaeralised Lending Dae: 4-11-2008 Number: 8/18 Inroducion This noe explains how i is possible o handle collaeralised lending wihin Risk Conroller. The approach draws on he faciliies

More information

Interest Rates, Inflation, and Federal Reserve Policy Since 1980. Peter N. Ireland * Boston College. March 1999

Interest Rates, Inflation, and Federal Reserve Policy Since 1980. Peter N. Ireland * Boston College. March 1999 Ineres Raes, Inflaion, and Federal Reserve Policy Since 98 Peer N. Ireland * Boson College March 999 Absrac: This paper characerizes Federal Reserve policy since 98 as one ha acively manages shor-erm nominal

More information

Table of contents Chapter 1 Interest rates and factors Chapter 2 Level annuities Chapter 3 Varying annuities

Table of contents Chapter 1 Interest rates and factors Chapter 2 Level annuities Chapter 3 Varying annuities Table of conens Chaper 1 Ineres raes and facors 1 1.1 Ineres 2 1.2 Simple ineres 4 1.3 Compound ineres 6 1.4 Accumulaed value 10 1.5 Presen value 11 1.6 Rae of discoun 13 1.7 Consan force of ineres 17

More information

Chapter 6. First Order PDEs. 6.1 Characteristics The Simplest Case. u(x,t) t=1 t=2. t=0. Suppose u(x, t) satisfies the PDE.

Chapter 6. First Order PDEs. 6.1 Characteristics The Simplest Case. u(x,t) t=1 t=2. t=0. Suppose u(x, t) satisfies the PDE. Chaper 6 Firs Order PDEs 6.1 Characerisics 6.1.1 The Simples Case Suppose u(, ) saisfies he PDE where b, c are consan. au + bu = 0 If a = 0, he PDE is rivial (i says ha u = 0 and so u = f(). If a = 0,

More information

PROFIT TEST MODELLING IN LIFE ASSURANCE USING SPREADSHEETS PART ONE

PROFIT TEST MODELLING IN LIFE ASSURANCE USING SPREADSHEETS PART ONE Profi Tes Modelling in Life Assurance Using Spreadshees PROFIT TEST MODELLING IN LIFE ASSURANCE USING SPREADSHEETS PART ONE Erik Alm Peer Millingon 2004 Profi Tes Modelling in Life Assurance Using Spreadshees

More information

Morningstar Investor Return

Morningstar Investor Return Morningsar Invesor Reurn Morningsar Mehodology Paper Augus 31, 2010 2010 Morningsar, Inc. All righs reserved. The informaion in his documen is he propery of Morningsar, Inc. Reproducion or ranscripion

More information

Stochastic Calculus, Week 10. Definitions and Notation. Term-Structure Models & Interest Rate Derivatives

Stochastic Calculus, Week 10. Definitions and Notation. Term-Structure Models & Interest Rate Derivatives Sochasic Calculus, Week 10 Term-Srucure Models & Ineres Rae Derivaives Topics: 1. Definiions and noaion for he ineres rae marke 2. Term-srucure models 3. Ineres rae derivaives Definiions and Noaion Zero-coupon

More information

INSTRUMENTS OF MONETARY POLICY*

INSTRUMENTS OF MONETARY POLICY* Aricles INSTRUMENTS OF MONETARY POLICY* Bernardino Adão** Isabel Correia** Pedro Teles**. INTRODUCTION A classic quesion in moneary economics is wheher he ineres rae or he money supply is he beer insrumen

More information

( ) in the following way. ( ) < 2

( ) in the following way. ( ) < 2 Sraigh Line Moion - Classwork Consider an obbec moving along a sraigh line eiher horizonally or verically. There are many such obbecs naural and man-made. Wrie down several of hem. Horizonal cars waer

More information

The Real Business Cycle paradigm. The RBC model emphasizes supply (technology) disturbances as the main source of

The Real Business Cycle paradigm. The RBC model emphasizes supply (technology) disturbances as the main source of Prof. Harris Dellas Advanced Macroeconomics Winer 2001/01 The Real Business Cycle paradigm The RBC model emphasizes supply (echnology) disurbances as he main source of macroeconomic flucuaions in a world

More information

AP Calculus BC 2010 Scoring Guidelines

AP Calculus BC 2010 Scoring Guidelines AP Calculus BC Scoring Guidelines The College Board The College Board is a no-for-profi membership associaion whose mission is o connec sudens o college success and opporuniy. Founded in, he College Board

More information

Name: Algebra II Review for Quiz #13 Exponential and Logarithmic Functions including Modeling

Name: Algebra II Review for Quiz #13 Exponential and Logarithmic Functions including Modeling Name: Algebra II Review for Quiz #13 Exponenial and Logarihmic Funcions including Modeling TOPICS: -Solving Exponenial Equaions (The Mehod of Common Bases) -Solving Exponenial Equaions (Using Logarihms)

More information

Estimating Time-Varying Equity Risk Premium The Japanese Stock Market 1980-2012

Estimating Time-Varying Equity Risk Premium The Japanese Stock Market 1980-2012 Norhfield Asia Research Seminar Hong Kong, November 19, 2013 Esimaing Time-Varying Equiy Risk Premium The Japanese Sock Marke 1980-2012 Ibboson Associaes Japan Presiden Kasunari Yamaguchi, PhD/CFA/CMA

More information

Can Austerity Be Self-defeating?

Can Austerity Be Self-defeating? DOI: 0.007/s07-0-0-7 Auseriy Can Auseriy Be Self-defeaing? Wih European governmens cuing back on spending, many are asking wheher his could make maers worse. In he UK for insance, recen OECD esimaes sugges

More information

LAB 6: SIMPLE HARMONIC MOTION

LAB 6: SIMPLE HARMONIC MOTION 1 Name Dae Day/Time of Lab Parner(s) Lab TA Objecives LAB 6: SIMPLE HARMONIC MOTION To undersand oscillaion in relaion o equilibrium of conservaive forces To manipulae he independen variables of oscillaion:

More information

The Identification of the Response of Interest Rates to Monetary Policy Actions Using Market-Based Measures of Monetary Policy Shocks

The Identification of the Response of Interest Rates to Monetary Policy Actions Using Market-Based Measures of Monetary Policy Shocks The Idenificaion of he Response of Ineres Raes o Moneary Policy Acions Using Marke-Based Measures of Moneary Policy Shocks Daniel L. Thornon Federal Reserve Bank of S. Louis Phone (314) 444-8582 FAX (314)

More information

Acceleration Lab Teacher s Guide

Acceleration Lab Teacher s Guide Acceleraion Lab Teacher s Guide Objecives:. Use graphs of disance vs. ime and velociy vs. ime o find acceleraion of a oy car.. Observe he relaionship beween he angle of an inclined plane and he acceleraion

More information

Chapter 2 Problems. 3600s = 25m / s d = s t = 25m / s 0.5s = 12.5m. Δx = x(4) x(0) =12m 0m =12m

Chapter 2 Problems. 3600s = 25m / s d = s t = 25m / s 0.5s = 12.5m. Δx = x(4) x(0) =12m 0m =12m Chaper 2 Problems 2.1 During a hard sneeze, your eyes migh shu for 0.5s. If you are driving a car a 90km/h during such a sneeze, how far does he car move during ha ime s = 90km 1000m h 1km 1h 3600s = 25m

More information

Why Do Real and Nominal. Inventory-Sales Ratios Have Different Trends?

Why Do Real and Nominal. Inventory-Sales Ratios Have Different Trends? Why Do Real and Nominal Invenory-Sales Raios Have Differen Trends? By Valerie A. Ramey Professor of Economics Deparmen of Economics Universiy of California, San Diego and Research Associae Naional Bureau

More information

Does International Trade Stabilize Exchange Rate Volatility?

Does International Trade Stabilize Exchange Rate Volatility? Does Inernaional Trade Sabilize Exchange Rae Volailiy? Hui-Kuan Tseng, Kun-Ming Chen, and Chia-Ching Lin * Absrac Since he early 980s, major indusrial counries have been suffering severe muli-laeral rade

More information

Wage Bargaining, Job Matching, and the Great Depression

Wage Bargaining, Job Matching, and the Great Depression Wage Bargaining, Job Maching, and he Grea Depression Chris Reicher UC San Diego May 2008 Wage Bargaining, Job Maching, and he Grea Depression January 2008 Oupu, employmen (% of rend): 1923-1941 110% 100%

More information

The Interest Rate Risk of Mortgage Loan Portfolio of Banks

The Interest Rate Risk of Mortgage Loan Portfolio of Banks The Ineres Rae Risk of Morgage Loan Porfolio of Banks A Case Sudy of he Hong Kong Marke Jim Wong Hong Kong Moneary Auhoriy Paper presened a he Exper Forum on Advanced Techniques on Sress Tesing: Applicaions

More information

PHYS245 Lab: RC circuits

PHYS245 Lab: RC circuits PHYS245 Lab: C circuis Purpose: Undersand he charging and discharging ransien processes of a capacior Display he charging and discharging process using an oscilloscope Undersand he physical meaning of

More information

Lecture Note on the Real Exchange Rate

Lecture Note on the Real Exchange Rate Lecure Noe on he Real Exchange Rae Barry W. Ickes Fall 2004 0.1 Inroducion The real exchange rae is he criical variable (along wih he rae of ineres) in deermining he capial accoun. As we shall see, his

More information

2.6 Limits at Infinity, Horizontal Asymptotes Math 1271, TA: Amy DeCelles. 1. Overview. 2. Examples. Outline: 1. Definition of limits at infinity

2.6 Limits at Infinity, Horizontal Asymptotes Math 1271, TA: Amy DeCelles. 1. Overview. 2. Examples. Outline: 1. Definition of limits at infinity .6 Limis a Infiniy, Horizonal Asympoes Mah 7, TA: Amy DeCelles. Overview Ouline:. Definiion of is a infiniy. Definiion of horizonal asympoe 3. Theorem abou raional powers of. Infinie is a infiniy This

More information

Monetary Policy & Real Estate Investment Trusts *

Monetary Policy & Real Estate Investment Trusts * Moneary Policy & Real Esae Invesmen Truss * Don Bredin, Universiy College Dublin, Gerard O Reilly, Cenral Bank and Financial Services Auhoriy of Ireland & Simon Sevenson, Cass Business School, Ciy Universiy

More information

Hedging with Forwards and Futures

Hedging with Forwards and Futures Hedging wih orwards and uures Hedging in mos cases is sraighforward. You plan o buy 10,000 barrels of oil in six monhs and you wish o eliminae he price risk. If you ake he buy-side of a forward/fuures

More information

Density Dependence. births are a decreasing function of density b(n) and deaths are an increasing function of density d(n).

Density Dependence. births are a decreasing function of density b(n) and deaths are an increasing function of density d(n). FW 662 Densiy-dependen populaion models In he previous lecure we considered densiy independen populaion models ha assumed ha birh and deah raes were consan and no a funcion of populaion size. Long-erm

More information

Price elasticity of demand for crude oil: estimates for 23 countries

Price elasticity of demand for crude oil: estimates for 23 countries Price elasiciy of demand for crude oil: esimaes for 23 counries John C.B. Cooper Absrac This paper uses a muliple regression model derived from an adapaion of Nerlove s parial adjusmen model o esimae boh

More information

Present Value Methodology

Present Value Methodology Presen Value Mehodology Econ 422 Invesmen, Capial & Finance Universiy of Washingon Eric Zivo Las updaed: April 11, 2010 Presen Value Concep Wealh in Fisher Model: W = Y 0 + Y 1 /(1+r) The consumer/producer

More information

Diagnostic Examination

Diagnostic Examination Diagnosic Examinaion TOPIC XV: ENGINEERING ECONOMICS TIME LIMIT: 45 MINUTES 1. Approximaely how many years will i ake o double an invesmen a a 6% effecive annual rae? (A) 10 yr (B) 12 yr (C) 15 yr (D)

More information

Working Paper No. 482. Net Intergenerational Transfers from an Increase in Social Security Benefits

Working Paper No. 482. Net Intergenerational Transfers from an Increase in Social Security Benefits Working Paper No. 482 Ne Inergeneraional Transfers from an Increase in Social Securiy Benefis By Li Gan Texas A&M and NBER Guan Gong Shanghai Universiy of Finance and Economics Michael Hurd RAND Corporaion

More information

BALANCE OF PAYMENTS. First quarter 2008. Balance of payments

BALANCE OF PAYMENTS. First quarter 2008. Balance of payments BALANCE OF PAYMENTS DATE: 2008-05-30 PUBLISHER: Balance of Paymens and Financial Markes (BFM) Lena Finn + 46 8 506 944 09, lena.finn@scb.se Camilla Bergeling +46 8 506 942 06, camilla.bergeling@scb.se

More information

Chapter 8 Copyright Henning Umland All Rights Reserved

Chapter 8 Copyright Henning Umland All Rights Reserved Chaper 8 Copyrigh 1997-2004 Henning Umland All Righs Reserved Rise, Se, Twiligh General Visibiliy For he planning of observaions, i is useful o know he imes during which a cerain body is above he horizon

More information

The Optimal Inflation Rate in New Keynesian Models: Should Central Banks Raise Their Inflation Targets in Light of the ZLB?

The Optimal Inflation Rate in New Keynesian Models: Should Central Banks Raise Their Inflation Targets in Light of the ZLB? The Opimal Inflaion Rae in New Keynesian Models: Should Cenral Banks Raise Their Inflaion Targes in Ligh of he ZLB? Olivier Coibion Yuriy Gorodnichenko Johannes Wieland College of William and Mary U.C.

More information

The Asymmetric Effects of Oil Shocks on an Oil-exporting Economy*

The Asymmetric Effects of Oil Shocks on an Oil-exporting Economy* CUADERNOS DE ECONOMÍA, VOL. 47 (MAYO), PP. 3-13, 2010 The Asymmeric Effecs of Oil Shocks on an Oil-exporing Economy* Omar Mendoza Cenral Bank of Venezuela David Vera Ken Sae Universiy We esimae he effecs

More information

Follow links Class Use and other Permissions. For more information, send to:

Follow links Class Use and other Permissions. For more information, send  to: COPYRIGHT NOTICE: David A. Kendrick, P. Ruben Mercado, and Hans M. Amman: Compuaional Economics is published by Princeon Universiy Press and copyrighed, 2006, by Princeon Universiy Press. All righs reserved.

More information

Individual Health Insurance April 30, 2008 Pages 167-170

Individual Health Insurance April 30, 2008 Pages 167-170 Individual Healh Insurance April 30, 2008 Pages 167-170 We have received feedback ha his secion of he e is confusing because some of he defined noaion is inconsisen wih comparable life insurance reserve

More information

CRISES AND THE FLEXIBLE PRICE MONETARY MODEL. Sarantis Kalyvitis

CRISES AND THE FLEXIBLE PRICE MONETARY MODEL. Sarantis Kalyvitis CRISES AND THE FLEXIBLE PRICE MONETARY MODEL Saranis Kalyviis Currency Crises In fixed exchange rae regimes, counries rarely abandon he regime volunarily. In mos cases, raders (or speculaors) exchange

More information

Usefulness of the Forward Curve in Forecasting Oil Prices

Usefulness of the Forward Curve in Forecasting Oil Prices Usefulness of he Forward Curve in Forecasing Oil Prices Akira Yanagisawa Leader Energy Demand, Supply and Forecas Analysis Group The Energy Daa and Modelling Cener Summary When people analyse oil prices,

More information

LONG-TERM DEBT AND OPTIMAL POLICY IN THE FISCAL THEORY OF THE PRICE LEVEL

LONG-TERM DEBT AND OPTIMAL POLICY IN THE FISCAL THEORY OF THE PRICE LEVEL Economerica, Vol. 69, No. 1 January, 001, 69116 LONG-TERM DEBT AND OPTIMAL POLICY IN THE FISCAL THEORY OF THE PRICE LEVEL BY JOHN H. COCHRANE 1 The fiscal heory says ha he price level is deermined by he

More information