The economics of money, banking, and financial markets

CHAPTER 22 APPENDIX 1

The Effects of Macroeconomic Shocks on Asset Prices

Go to MyLab Economics, 

www.pearson.com/mylab/economics

CHAPTER 22 APPENDIX 2

Aggregate Demand and Supply: A Numerical Example 

Go to MyLab Economics, 

www.pearson.com/mylab/economics

A01_MISH3821_12_SE_FM.indd   28

27/10/17   5:49 PM

---

 

Contents in Detail 

xxix

CHAPTER 22 APPENDIX 3

The Algebra of the Aggregate Demand and Supply Model

Go to MyLab Economics, 

www.pearson.com/mylab/economics

CHAPTER 22 APPENDIX 4

The Taylor Principle and Inflation Stability 

Go to MyLab Economics, 

www.pearson.com/mylab/economics

CHAPTER 23

Monetary Policy Theory 

559

Response of Monetary Policy to Shocks ...............................................................................559

Response to an Aggregate Demand Shock ........................................................................... 560

Response to a Permanent Supply Shock .............................................................................. 562

Response to a Temporary Supply Shock ............................................................................. 564

The Bottom Line: The Relationship Between Stabilizing Inflation and  

Stabilizing Economic Activity ........................................................................................ 567

How Actively Should Policymakers Try to Stabilize Economic Activity? .....................567

Lags and Policy Implementation ......................................................................................... 567

Inflation: Always and Everywhere a Monetary Phenomenon ........................................568

FYI  The Activist/Nonactivist Debate Over the Obama Fiscal Stimulus Package  569

Causes of Inflationary Monetary Policy ................................................................................569

High Employment Targets and Inflation ............................................................................. 569

APPLICATION

  The Great Inflation ..........................................................................573

Monetary Policy at the Zero Lower Bound..........................................................................575

Deriving the Aggregate Demand Curve at the Zero Lower Bound ....................................... 575

The Disappearance of the Self-Correcting Mechanism at the Zero Lower Bound ................. 577

APPLICATION

  Nonconventional Monetary Policy and Quantitative Easing ...........578

Liquidity Provision ............................................................................................................. 579

Asset Purchases and Quantitative Easing ............................................................................ 580

Management of Expectations .............................................................................................. 581

APPLICATION

  Abenomics and the Shift in Japanese Monetary Policy in 2013 .......582

Summary 584  •  Key Terms 584  •  Questions 585  •  Applied Problems 586  •   

Data Analysis Problems  586   •   Web Exercises  587   •   Web References  587