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What are the faults of the New Keynesian model? In the New Keynesian model, does a liquidity trap imply that no economic policy can close a positive output gap?
Some macroeconomists have argued that it would be beneficial for the government to run. Carefully explain why or why not, using the New Keynesian model.
What would the macroeconomic effects be? Does it matter if there is a liquidity trap where excess reserves are held in the financial system?
Plot the percentage changes in quarterly real GDP and in quarterly M2. Is there tendency for changes in M2 to precede changes in the same direction in real GDP?
What components on the asset side of the Fed's balance sheet were responsible for the increase in the reserve balances that began in late 2008.
How should the central bank change its target interest rate in response to each of the following shocks. Use diagrams and explain your results.
What will be the effect of a reduction in the central bank's target interest rate? Construct a diagram and explain your results.
Discuss the implications for what the data can reveal about what is the better business cycle model, the real business cycle model or the New Keynesian model.
How well does the central bank perform in relative to its goal? Explain using diagrams.
What does this imply about the power of monetary policy relative to fiscal policy in closing a positive output gap? Explain your results with the aid of diagram
Plot monthly percentage changes in the consumer price index, and in the Standard and Poor's stock price index.
Plot the difference between real GDP and potential real GDP, as measured by the Congressional Budget Office. What could this difference measure?
Plot the federal funds rate, and the difference between the unemployment rate and the natural rate of unemployment (Congressional Budget Office measure).
What is a small open economy? Why is it appropriate to use a small open-economy model to explain events in the United States?
Why could it be a good thing for a country to run a current account deficit? What can constrain borrowing in world markets by an individual country?
What are the effects of a temporary increase in government expenditure on output, absorption, and the current account surplus?
What are the effects of an increase in current and future total factor productivity on output, absorption, and the current account surplus?
Determine how this affects consumption plus government spending in the present and the future, and the current account surplus. Explain your results.
Which advice should the government take if its goal is to reduce the current account deficit? Explain.
Think about a good or service for which you believe there has been a shift in demand or supply.
Read the article from The Economist magazine entitled "Facebook: Imperial Ambitions."
What type of study would be most appropriate to determine the economic value of the goods listed in question 1? Explain fully.
Determine the effects this has on the quantity and price of credit card balances, the demand for money, and the price level. Explain your results.
However, the central bank can observe productivity shocks. How should the central bank conduct monetary policy? Discuss.
Suppose that there is an increase in the number of ATM machines in service. What are the effects of this innovation on demand for money and on the price level?