中级宏观经济学CHAP04

ChapterFour1CHAPTER4MoneyandInflation®APowerPointTutorialToAccompanyMACROECONOMICS,6th.ed.N.GregoryMankiwByMannigJ.SimidianChapterFour2StockofassetsUsedfortransactionsAtypeofwealthMoneyInflationisanincreaseintheaveragelevelofprices,andapriceistherateatwhichmoneyisexchangedforagoodorservice.ChapterFour3Itservesasastoreofvalue,unitofaccount,andamediumofexchange.Theeasewithwhichmoneyisconvertedintootherthingssuchasgoodsandservices--issometimescalledmoney’sliquidity.ChapterFour4FunctionofMoney(Modern)•Transactionneed(L1)preventneed•dependonY•speculationneed(L2)•dependonrChapterFour5Moneyistheyardstickwithwhichwemeasureeconomictransactions.Withoutit,wewouldbeforcedtobarter.However,barterrequiresthedoublecoincidenceofwants—theunlikelysituationoftwopeople,eachhavingagoodthattheotherwantsattherighttimeandplacetomakeanexchange.ChapterFour6Fiatmoneyismoneybydeclaration.Ithasnointrinsicvalue.Commoditymoneyismoneythathasintrinsicvalue.Whenpeopleusegoldasmoney,theeconomyissaidtobeonagoldstandard.ChapterFour7Thegovernmentmaygetinvolvedinthemonetarysystemtohelppeoplereducetransactioncosts.Usinggoldasacurrencyiscostlybecausethepurityandweighthastobeverified.Also,coinsaremorewidelyrecognizedthangoldbullion.Thegovernmentthenacceptsgoldfromthepublicinexchangeforgold-certificates—piecesofpaperthatcanberedeemedforactualgold.Ifpeopletrustthatthegovernmentwillgivethemthegolduponrequest,thenthecurrencywillbejustasvaluableasthegolditself—plus,itiseasiertocarryaroundthepaperthanthegold.Theendresultisthatbecausenooneredeemsthegoldanymoreandeveryoneacceptsthepaper,theywillhavevalueandserveasmoney.ChapterFour8Themoneysupplyisthequantityofmoneyavailableinaneconomy.Thecontroloverthemoneysupplyiscalledmonetarypolicy.IntheUnitedStates,monetarypolicyisconductedinapartiallyindependentinstitutioncalledthecentralbank.ThecentralbankintheU.S.iscalledtheFederalReserve,ortheFed.ChapterFour9Toexpandthemoneysupply:TheFederalReservebuysU.S.TreasuryBondsandpaysforthemwithnewmoney.Toreducethemoneysupply:TheFederalReservesellsU.S.TreasuryBondsandreceivestheexistingdollarsandthendestroysthem.ChapterFour10TheFederalReservecontrolsthemoneysupplyin3ways:ConductingOpenMarketOperations(buyingandsellingU.S.Treasurybonds).ChangingtheReserverequirements(neverreallyused).ChangingtheDiscountratewhichmemberbanks(notmeetingthereserverequirements)paytoborrowfromtheFed.ChapterFour11Thequantityequationisanidentity:thedefinitionsofthefourvariablesmakeittrue.Ifonevariablechanges,oneormoreoftheothersmustalsochangetomaintaintheidentity.Thequantityequationwewillusefromnowonisthemoneysupply(M)timesthevelocityofmoney(V)whichequalsprice(P)timesthenumberoftransactions(T):MoneyVelocity=PriceTransactionsMV=PTVinthequantityequationiscalledthetransactionsvelocityofmoney.Thistellsusthenumberoftimesadollarbillchangeshandsinagivenperiodoftime.ChapterFour12Transactionsandoutputarerelated,becausethemoretheeconomyproduces,themoregoodsareboughtandsold.IfYdenotestheamountofoutputandPdenotesthepriceofoneunitofoutput,thenthedollarvalueofoutputisPY.Weencounteredmeasuresforthesevariableswhenwediscussedthenationalincomeaccounts.MoneyVelocity=PriceOutputMV=PYThisversionofthequantityequationiscalledtheincomevelocityofmoney,whichtellsusthenumberoftimesadollarbillenterssomeone’sincomeinagiventime.ChapterFour13Let’snowexpressthequantityofmoneyintermsofthequantityofgoodsandservicesitcanbuy.Thisamount,M/Piscalledrealmoneybalances.Realmoneybalancesmeasurethepurchasingpowerofthestockofmoney.Amoneydemandfunctionisanequationthatshowsthedeterminantsofrealmoneybalancespeoplewishtohold.Hereisasimplemoneydemandfunction:wherekisaconstantthattellsushowmuchmoneypeoplewanttoholdforeverydollartheyearn.Thisequationstatesthatthequantityofrealmoneybalancesdemandedisproportionaltorealincome.(M/P)d=kYChapterFour14Themoneydemandfunctionislikethedemandfunctionforaparticulargood.Herethe“good”istheconvenienceofholdingrealmoneybalances.Higherincomeleadstoagreaterdemandforrealmoneybalances.Themoneydemandequationoffersanotherwaytoviewthequantityequation(MV=PY)whereV=1/k.Thisshowsthelinkbetweenthedemandformoneyandthevelocityofmoney.Whenpeopleholdalotofmoneyforeachdollarofincome(kislarge),moneychangeshandsinfrequently(Vissmall).Conversely,whenpeoplewanttoholdonlyalittlemoney(kissmall),moneychangeshandsfrequently(Vislarge).Inotherwords,themoneydemandparameterkandthevelocityofmoneyVareoppositesidesofthesamecoin.ChapterFour15Thequantityequationcanbeviewedasadefinition:itdefinesvelocityVastheratioofnominalGDP,PY,tothequantityofmoneyM.But,ifwemaketheassumptionthatthevelocityofmoneyisconstant,thenthequantityequationMV=PYbecomesausefultheoryoftheeffectsofmoney.ThebarovertheVmeansthatvelocityisfixed.So,let’sholditconstant!RememberachangeinthequantityofmoneycausesaproportionalchangeinnominalGDP.MV=PYChapterFour16Threebuildingblocksthatdeterminetheeconomy’soveralllevelofprices:ThefactorsofproductionandtheproductionfunctiondeterminethelevelofoutputY.Themoneysupplydeterminesthenominalvalueofoutput,PY.Thisfollowsfromthequantityequa