This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Y/Y=sA-d Money demand M^d/P=L(Y,r+ ) Velocity V=nominal GDP/nominal money stock=PY/M Asset Market Equilibrium Condition M/P=L(Y,r+ ) Inflation Rate = M/M- y Y/Y y=Income elasticity of money demand Short-run aggregate supply curve Y=Ybar+b(P-P^e) Expectations-augmented Phillips curve = ^e-h(u-ubar) Money Supply M=sum of currency held by the non-public bank +public bank deposits M=CU+DEP Monetary Base BASE=CU+Bank Reserves Money Supply M=((cu+1)/(cu+res)) BASE B=nominal government budget deficit Change in debt-GDP ratio Deficit/nominal GDP-((total debt/nominalGDP) xgrowth rate of nom GDP) B=Government debt outstanding; B^p=government debt held by public; B^cp=government debt held by central bank Deficit= B= B^p+ B^cb= B^p+ M Real seignorage revenue R= M/P= (M/P)...
View Full Document
- Spring '10