Содержание
Слайд 2
Derivation of the LM-Curve With Liquidity Trap
r
M/P
MS1
Md
Derivation of the LM-Curve With Liquidity Trap
r
M/P
MS1
Md
(Y1)
C
B
r1
r0
A
Y
Y2
Y3
Y1
A
B
C
Md (Y2)
Md (Y3)
r2
LM
r1
r2
r0
πe = 0
As income falls below Y3 , no effect on the interest rate. The LM-curve is horizontal.
Слайд 3
Monetary Policy in a Liquidity Trap
r
Y
Y0
YF
LM1
Monetary Policy in a Liquidity Trap
r
Y
Y0
YF
LM1
IS
r
LM0
LM2
A
B
Y1
πe = 0
The economy is at Y0 below full employment potential. Monetary policy is ineffective in pushing the economy beyond Y1.
Слайд 4
Fiscal Policy in a Liquidity Trap
r
Y
Y0
YF
LM
Fiscal Policy in a Liquidity Trap
r
Y
Y0
YF
LM
IS1
Y1
πe = 0
IS2
But, fiscal policy seems to work and you get the full multiplier effect as you move from Y0 to Y1. Why do you get the full multiplier effect?
Слайд 5
Fiscal Policy in a Liquidity Trap
r
Y
Y0
YF
LM
Fiscal Policy in a Liquidity Trap
r
Y
Y0
YF
LM
IS1
Y1
πe = 0
IS2
IS3