Macroeconomics

596 |

I N D E X

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Big Mac price and exchange rate in,

148t

collective bargaining in, 173t

government debt of, 468t

inflation and money growth in, 92f

inflation and nominal interest rate in,

96f

inflation in, 144–145, 145f

investment rate in, 202f

Taiwan

Big Mac price and exchange rate in,

148t

economic growth in, 251–252

TARP. See Troubled Assets Relief

Program (TARP)

Tax(es)

decrease in, saving and, 72

future, consumers and, 480–483

incentives and, 478

inflation, 80, 93

interest rates and, 64

investment and, 532–533

IS curve shifts and short-run equilib-

rium and, 313, 314f

Keynesian cross and, 294–296, 295f

Tax credit, earned income, 171

Tax cuts, 4

of 1964, 516

under George W. Bush, 133, 296,

481–482

under Kennedy, 296

Tax increases

under Clinton, 133

under George H. W. Bush, 133

Tax multiplier, 294–295, 295f

Tax Reform Act of 1986, 533

Tax smoothing, budget deficits and, 486

Tax surcharges, of 1968, 516

Taylor, John B., 415, 437

Taylor principle, 436–437, 437f

Taylor rule, 415–416, 416f

Technological externalities, 233

Technological progress

economic growth and, 249–250

encouraging, 235–236

labor-augmenting, 223

in Solow growth model, 222–225

steady state with, 223–224, 224f

Temin, Peter, 326n

Term, interest rates and, 64

Terrorist attacks of 9/11/2001, reces-

sion of 2001 and, 319–320

Thailand

Big Mac price and exchange rate in,

148t

financial crisis of 1997-1998 and,

360–361

investment rate in, 202f

Thaler, Richard H., 521

Theory. See Economic models; specific

models and theories

Theory of liquidity preference,

301–303, 302f, 303f

Time horizons, macroeconomic,

265–269

Time inconsistency of policy, 454–456,

463–465

Tobacman, Jeremy, 520n

Tobin, James, 14, 533, 557n, 559n

Tobin’s q, 533–536, 535f, 538

Togo, investment rate in, 202f

Total factor productivity, 236, 250

Trade, NAFTA and, 359

Trade balances

bilateral, 124

definition of, 122

fiscal policy abroad and, 129–130,

130f

fiscal policy at home and, 128–129,

129f

international flows of capital and

goods and, 122–124, 123t

real exchange rate and, 137, 138f

shifts in investment demand and,

130f, 130–131

in United States, 131, 132f, 133–134

Trade deficits, 123

direction of capital flow and,

134–135

of South Korea, 131

twin, 133

of United States, 131, 132f, 133–134

Trade policy

effects of, 141–143, 142f

fixed exchange rates and, 354–355,

355f

floating exchange rates and, 348, 349f

in large open economies, 159, 160f

Trade surpluses, 123

Transactions, quantity theory of money

and, 87–88

Transactions theories, 558–559

Transactions velocity of money, 86–87

Transfer payments, 27. See also Social

Security; Welfare

Transitory income, 514

Troubled Assets Relief Program

(TARP), 474–475

Tufte, Edward, 454n

Turkey

Big Mac price and exchange rate in,

148t

inflation and money growth in, 91,

92f

inflation and nominal interest rate in,

96f

Twin deficits, 133

UAE. See United Arab Emirates (UAE)

Underground economy, 23

currencies and, 58

Underwater homeowners, 333

Unemployment, 163–187