Money and Inflation 货币与通货膨胀课件.ppt

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1、MoneyandInflation4Inthischapter,youwilllearn…Theclassicaltheoryofinflationcauseseffectssocialcosts“Classical”–assumespricesareflexible&marketsclearAppliestothelongrunU.S.inflationanditstrend,1960-2006slide20%3%6%9%12%15%1960196519701975198019851990199520002005long-runtrend

2、%changeinCPIfrom12monthsearlierCHAPTER4MoneyandInflationTheconnectionbetweenmoneyandpricesInflationrate=thepercentageincreaseintheaveragelevelofprices.Price=amountofmoneyrequiredtobuyagood.Becausepricesaredefinedintermsofmoney,weneedtoconsiderthenatureofmoney,thesupply

3、ofmoney,andhowitiscontrolled.Money:DefinitionMoneyisthestockofassetsthatcanbereadilyusedtomaketransactions.Money:Functionsmediumofexchangeweuseittobuystuffstoreofvaluetransferspurchasingpowerfromthepresenttothefutureunitofaccountthecommonunitbywhicheveryonemeasurespricesa

4、ndvaluesMoney:Types1.fiatmoneyhasnointrinsicvalueexample:thepapercurrencyweuse2.commoditymoneyhasintrinsicvalueexamples:goldcoins,cigarettesinP.O.W.campsDiscussionQuestionWhichofthesearemoney?a.Currencyb.Checksc.Depositsincheckingaccounts(“demanddeposits”)d.Creditcardse

5、.Certificatesofdeposit(“timedeposits”)ThemoneysupplyandmonetarypolicydefinitionsThemoneysupplyisthequantityofmoneyavailableintheeconomy.Monetarypolicyisthecontroloverthemoneysupply.ThecentralbankMonetarypolicyisconductedbyacountry’scentralbank.IntheU.S.,thecentralbanki

6、scalledtheFederalReserve(“theFed”).TheFederalReserveBuildingWashington,DCMoneysupplymeasures,April2006$6799M1+smalltimedeposits,savingsdeposits,moneymarketmutualfunds,moneymarketdepositaccountsM2$1391C+demanddeposits,travelers’checks,othercheckabledepositsM1$739Curren

7、cyCamount($billions)assetsincludedsymbolTheQuantityTheoryofMoneyAsimpletheorylinkingtheinflationratetothegrowthrateofthemoneysupply.Beginswiththeconceptofvelocity…Velocitybasicconcept:therateatwhichmoneycirculatesdefinition:thenumberoftimestheaveragedollarbillchangeshands

8、inagiventimeperiodexample:In2007,$500billionintransactionsmoneysupply=$100billionTheavera