Chapter g Monetary Theory
Chapter 9 Monetary Theory
Monetary Theory is the theory which is about the economic influences of money
Monetary Theory is the theory which is about the economic influences of money
货而对经济的作用是通过货币的供需关系及 运动来实现的。 心货币需求理论是研究货币持有者保持货币 的动机、货币需求量的决定因素和各种因素 的相对重要性以及货币需求对物价和产出等 实际变量的影响的理论。 ◇货币供给理论是研究货币供给量由哪些因 素决定的以及如何决定的理论
货币对经济的作用是通过货币的供需关系及 运动来实现的。 v货币需求理论是研究货币持有者保持货币 的动机、货币需求量的决定因素和各种因素 的相对重要性以及货币需求对物价和产出等 实际变量的影响的理论。 v货币供给理论是研究货币供给量由哪些因 素决定的以及如何决定的理论
9. 1 The Classical foundation The amount of money in the economy should be right"? But the problem is what is the "right"amount of money?
9.1 The Classical Foundation The amount of money in the economy should be “right”? But , the problem is: what is the “right” amount of money?
The origins of monetary theory lie in the classical economics of Adam Smith and his friends. The two cornerstones of the classical system are say s law (萨伊定律) and the quantity theory. Say's law deals th interest rates, employment, and production The quantity theory explains the role of money
The origins of monetary theory lie in the classical economics of Adam Smith and his friends. The two cornerstones of the classical system are Say’s law (萨伊定律) and the quantity theory. Say’s law deals with interest rates, employment, and production. The quantity theory explains the role of money
9. 1.1 Say's law Jean baptiste Say( 1767-1832)is a French economist Supply creates its own demand. That means the economy could never suffer from underemployment or succumb to Thomas' fear of under-consumption. Total spending(demand) would always be sufficient to justify production at full employment(supply)
9.1.1 Say’s law Jean Baptiste Say (1767-1832) is a French economist. “Supply creates its o s its own demand.” That means the economy could never suffer from underemployment or succumb to Thomas’ fear of under-consumption. Total spending (demand) would always be sufficient to justify production at full employment(supply)
1.2 Classical interest theory >The overall level of interest rates was determined by the supply of and demand for ads anable jund >Classical economists recognize that saving and investment are the two main factors, in the long run, which underlie the supply of and demand for loanable funds
9.1.2 Classical interest theory ØThe overall level of interest rates was determined by the supply of and demand for loanable funds. ØClassical economists recognize that saving and investment are the two main factors, in the long run, which underlie the supply of and demand for loanable funds
According to classical economics, saving is afunction of the rate of interest. The higher the rate of interest, the more money will be saved. Investment is also a function of the rate of interest, it will increases as the rate of interest declines
According to ording to classical economics, saving is a function of the rate of interest. The higher the rate of interest, the more money will be saved. Investment is also a function of the rate of interest, it will increases as th s as the rate of interest declines
OThe relationship between interest rate and sM吧 OThe relationship between interest rate and investment。 What is equilibrium interest rate
qThe relationship relationship between between interest interest rate and saving. qThe relationship relationship between between interest interest rate and investment. What is equilibrium interest rate?
Interest rateInvestment Saving Equilibrium rate Below Equilibrium rate Saving investment Classical interest theory
Interest rate Equilibrium rate Below Equilibrium rate Investment Saving Saving, investment ________________________ Classical interest theory
