Monetary policy as the stabilization activity

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1. Monetary policy as the stabilization activity
2. The dualism of monetary policyMonetary policy: policy
3. Stable prices / anti-inflation activity (ECB, NBP)Stable growth/ anti-cyclical activity (Fed)Two objectives of monetary policy
4. Keynesism: economic growth and full employment within
5. SIT (strict inflation targeting): contractionary monetary policy
6. Expansionary monetary policy
7. Contractionary monetary policy
8. How does money market affect goods market?
9. The impact of interest rates on consumption
10. The impact of interest rates on consumption (2)
11. The impact of interest rates on investment
12. The impact of interest rates on investment (2)
13. Interest rates and aggregate demand: recap.
14. How does goods market affect money market?
15. Aggregate demand, income and interest rates (1)Growing
16. Aggregate demand, income and interest rates (2)
17. Crowding out effect
18. From the political point of view the
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The dualism of monetary policyMonetary policy: policy of determining volume of money in the economy in order to keep inflation under control as well as to affect production and income.„The prime

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Monetary policy as the stabilization activity

Слайды и текст этой презентации

Слайд 1Monetary policy as the stabilization activity

Слайд 2The dualism of monetary policy

Monetary policy: policy of determining volume

of money in the economy in order to keep inflation

under control as well as to affect production and income.

„The prime aim of NBP is the preservation of stable price level. It can also support government in its economic policy on condition that such support doesn’t restrain the prime goal”. NBP Act

The dualism of monetary policyMonetary policy: policy of determining volume of money in the economy in order

Слайд 3
Stable prices / anti-inflation activity (ECB, NBP)

Stable growth/ anti-cyclical activity

(Fed)
Two objectives of monetary policy

Слайд 4
Keynesism: economic growth and full employment within economic equilibrium

Monetarism: price

stability (leading to faster economic growth and more flat business

cycle sinusoid in long-run)

Objectives of monetary policy in different economic doctrines

Keynesism: economic growth and full employment within economic equilibriumMonetarism: price stability (leading to faster economic growth and

Слайд 5SIT (strict inflation targeting): contractionary monetary policy resulting in price

stability; growth stimulation is considered secondary goal

FIT (flexible inflation targeting):

compromising monetary policy that balances two objectives; growth stimulation is accompanied by less strict price control

SOT (strict output-gap targeting): expansionary / easy monetary policy that assumes growth stimulation the prime objective

Two objectives and three types of monetary policy

SIT (strict inflation targeting): contractionary monetary policy resulting in price stability; growth stimulation is considered secondary goalFIT

Слайд 6Expansionary monetary policy

Слайд 7Contractionary monetary policy

Слайд 8How does money market affect goods market?

Слайд 9The impact of interest rates on consumption (1)

Decrease in interest

rates positively affects the autonomous part of consumption:

loans become cheaper,

deposits

become more attractive leading to higher inclination of households to convert savings into consumption.

The impact of interest rates on consumption (1)Decrease in interest rates positively affects the autonomous part of

Слайд 10The impact of interest rates on consumption (2)

Слайд 11The impact of interest rates on investment (1)

Decrease in interest

rates positively affects investment spending of firms:

loans become cheaper,

deposits become

less attractive resulting in lower willingnes of firms to put their cash surpluses into the bank intead of investing them.

The impact of interest rates on investment (1)Decrease in interest rates positively affects investment spending of firms:loans

Слайд 12The impact of interest rates on investment (2)

Слайд 13Interest rates and aggregate demand: recap.

Слайд 14How does goods market affect money market?

Слайд 15Aggregate demand, income and interest rates (1)

Growing AD leads to

increases in GDP.

Greater GDP turns into bigger demand for

money.

Greater demand for money leads to upward pressure on interest rates.

Aggregate demand, income and interest rates (1)Growing AD leads to increases in GDP. Greater GDP turns into

Слайд 16Aggregate demand, income and interest rates (2)

Слайд 17Crowding out effect

Слайд 18
From the political point of view the key economic problem

is unemployment (and recession / slower economic growth responsible for

it).

Therefore government can be interested in the usage of the monetary policy to deal with this problem.

However, this may lead to lagged increase in the inflation rate.

Monetary policy objectives vs. independence of central banks

From the political point of view the key economic problem is unemployment (and recession / slower economic

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Разделы презентаций

Monetary policy as the stabilization activity

Содержание

Слайды и текст этой презентации

Слайд 1Monetary policy as the stabilization activity

Слайд 2The dualism of monetary policy

Monetary policy: policy of determining volume

of money in the economy in order to keep inflation

Слайд 3
Stable prices / anti-inflation activity (ECB, NBP)

Stable growth/ anti-cyclical activity

(Fed)
Two objectives of monetary policy

Слайд 4
Keynesism: economic growth and full employment within economic equilibrium

Monetarism: price

stability (leading to faster economic growth and more flat business

Слайд 5SIT (strict inflation targeting): contractionary monetary policy resulting in price

stability; growth stimulation is considered secondary goal

FIT (flexible inflation targeting):

Слайд 6Expansionary monetary policy

Слайд 7Contractionary monetary policy

Слайд 8How does money market affect goods market?

Слайд 9The impact of interest rates on consumption (1)

Decrease in interest

rates positively affects the autonomous part of consumption:

loans become cheaper,

deposits

Слайд 10The impact of interest rates on consumption (2)

Слайд 11The impact of interest rates on investment (1)

Decrease in interest

rates positively affects investment spending of firms:

loans become cheaper,

deposits become

Слайд 12The impact of interest rates on investment (2)

Слайд 13Interest rates and aggregate demand: recap.

Слайд 14How does goods market affect money market?

Слайд 15Aggregate demand, income and interest rates (1)

Growing AD leads to

increases in GDP.

Greater GDP turns into bigger demand for

Слайд 16Aggregate demand, income and interest rates (2)

Слайд 17Crowding out effect

Слайд 18
From the political point of view the key economic problem

is unemployment (and recession / slower economic growth responsible for

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Monetary policy as the stabilization activity

Содержание

Слайды и текст этой презентации

Слайд 1Monetary policy as the stabilization activity

Слайд 2The dualism of monetary policyMonetary policy: policy of determining volume

of money in the economy in order to keep inflation

Слайд 3Stable prices / anti-inflation activity (ECB, NBP)Stable growth/ anti-cyclical activity

(Fed)Two objectives of monetary policy

Слайд 4Keynesism: economic growth and full employment within economic equilibriumMonetarism: price

stability (leading to faster economic growth and more flat business

Слайд 5SIT (strict inflation targeting): contractionary monetary policy resulting in price

stability; growth stimulation is considered secondary goalFIT (flexible inflation targeting):

Слайд 6Expansionary monetary policy

Слайд 7Contractionary monetary policy

Слайд 8How does money market affect goods market?

Слайд 9The impact of interest rates on consumption (1)Decrease in interest

rates positively affects the autonomous part of consumption:loans become cheaper,deposits

Слайд 10The impact of interest rates on consumption (2)

Слайд 11The impact of interest rates on investment (1)Decrease in interest

rates positively affects investment spending of firms:loans become cheaper,deposits become

Слайд 12The impact of interest rates on investment (2)

Слайд 13Interest rates and aggregate demand: recap.

Слайд 14How does goods market affect money market?

Слайд 15Aggregate demand, income and interest rates (1)Growing AD leads to

increases in GDP. Greater GDP turns into bigger demand for

Слайд 16Aggregate demand, income and interest rates (2)

Слайд 17Crowding out effect

Слайд 18From the political point of view the key economic problem

is unemployment (and recession / slower economic growth responsible for

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Обратная связь

Что такое TheSlide.ru?

Слайд 2The dualism of monetary policy

Monetary policy: policy of determining volume

Слайд 3
Stable prices / anti-inflation activity (ECB, NBP)

Stable growth/ anti-cyclical activity

(Fed)
Two objectives of monetary policy

Слайд 4
Keynesism: economic growth and full employment within economic equilibrium

Monetarism: price

stability; growth stimulation is considered secondary goal

FIT (flexible inflation targeting):

Слайд 9The impact of interest rates on consumption (1)

Decrease in interest

rates positively affects the autonomous part of consumption:

loans become cheaper,

deposits

Слайд 11The impact of interest rates on investment (1)

Decrease in interest

rates positively affects investment spending of firms:

loans become cheaper,

deposits become

Слайд 15Aggregate demand, income and interest rates (1)

Growing AD leads to

increases in GDP.

Greater GDP turns into bigger demand for

Слайд 18
From the political point of view the key economic problem