《西方经济学原理》Chap 26 Central Banking and Monetary Policy

ECSENOMICS Chapter 26 Central Banking and Monetary Policy McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved

McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 26 Central Banking and Monetary Policy

ECSENOMICS A Bird's-Eye View of How Monetary C, Policy Affects Output and Inflation 1-191 Figure 26-1 Money Interest rates and red availability Aggregate teraction ol ASan McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved

McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. T-191 Figure 26-1 A Bird’s-Eye View of How Monetary Policy Affects Output and Inflation

ECSENOMICS The Major players in Monetary Policy 1-192 igure 26-2 Fi Reserve bank presidents New York Chairman of Federal Open the board Market Committee of governors (FOMC): Directs Board of governors open-market oper- Approves discount ations: advises rates: sets reserve on discount rate requirements: and reserve directs regulatory requirements operations 6 governors of the board McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved

McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. The Major Players in Monetary Policy T-192 Figure 26-2

ECSENOMICS While the Fed Ultimately Pursues Objectives like Stable Prices, Its Short-Term Operations Focus on the Intermediate Targets T193 Figure 26-3 The World as Seen from the Fed Open-market Stable prices operations Reserves Low unemployment Discount rate Money supply Reserve requirements Interest rates Rapid growth in real GDP Instruments Intermediate targets Ultimate objectives McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved

McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. While the Fed Ultimately Pursues Objectives like Stable Prices, Its Short-Term Operations Focus on the Intermediate Targets T-193 Figure 26-3

ECSENOMICS Federal reserve Determines Federal Funds rate T194 Figure 26-4 Monetarist experiment 30-year Treasury 15 a10 N 1980 1985 1990 1995 2000 McGraw-Hilllrwin Source: federalreserve board

McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Federal Reserve Determines Federal Funds Rate T-194 Figure 26-4 Source: Federal Reserve Board

ECSENOMICS The Money Market 1-195 Figure 26-5 D 10 D S M Mone McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved

McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. The Money Market T-195 Figure 26-5

ECSENOMICS Changes in Monetary Policy or Prices affect Interest rates T196 Figure 26-6 (a)Monetary Tightening (b) Money-Demand Shift 10 D 1 Money Money McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved

McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Changes in Monetary Policy or Prices Affect Interest Rates T-196 Figure 26-6

ECSENOMICS Central Bank Determines the Money Supply, Changing Interest Rates and Investment Thereby Affecting GDP 1-197 Figure 26-7 fc)Output Determined 冒3.30 S 100200 Investment(per year) (a)The Money Market (b) Demand for Investment McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved

McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Central Bank Determines the Money Supply, Changing Interest Rates and Investment, Thereby Affecting GDP T-197 Figure 26-7

ECSENOMICS An Expansionary monetary policy Shifts AD to Curve to the Right, Raising Output and Prices 1-198 Figure 26-8 Expansionary Monetary Policy =I AS AD 5 85=5 Real gdp McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved

McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. An Expansionary Monetary Policy Shifts AD Curve to the Right, Raising Output and Prices T-198 Figure 26-8