看向世界SpotWorld: Macroeconomic chapter 7

Chapter 7
Monetary policy	The actions the federal use to manage the interest rate, money supply to achieve certainly macroeconomic policy goals. Such as: · High employment · Economic growth · Stability of financial markets · Price stability · Supply stability. · Money supply · Interest rate
Three monetary policy tools	· Open market operations · Discount policy · Reserve requirements.
How federal manage money supply?	Bought of the securities(证券) -increase the money supply selling of the securities (证券) -decrease the money supply increase the Reserve requirements for banks. (准备金) -decrease in money supply decrease the Reserve requirements for banks. (准备金) -increase in money supply Lower interest rate -increase in money supply Higher interest rate -decrease in money supply
Two models of interest rate.	The loanable funds model. 可贷资金 · Investors allow other people to use his fund in a period in order to make a profit. · Concern with the long-term real rate of interest. The money market model. 货币市场 · Concern with short term real rate of interest, usually less than 1 year. · Include short term bonds, commercial paper, short term securities and so on. · Less risk high liquidity, short transaction period.
Taylor rules Formula	Formula: =current inflation rate+ Equilibrium real federal funds rate+ (1/2* inflation gap) +(1/2 *output gap)
Inflation Targeting	· If the forecast result is higher than target inflation rate, a contractionary monetary policy (紧缩性货币政策)will be taken. · If the forecast result is lower than target inflation rate, an expansionary monetary policy(扩张性货币政策) will be taken. · If the forecast result is near to target inflation rate, monetary policy remains unchanged.