Banking and Monetary Policy_Butkiewicz_Date__042910

Banking and Monetary Policy_Butkiewicz_Date__042910 - 53:...

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Chapter 13 continued 27: lending is slow to recover 30: trends cannot be made by one month data, have to look at longer run/more data 32: 1950s- “made in Japan” was an insult signaling poor quality - Financial problems create stress 36: importance of bank finance for business 38: when in boom period, companies start earning money and can grow/expand 39: reinvest part of earnings in company—decrease cost 42: monetary policy works through a multitude of channels 47: affects sectors most sensitive to higher interest rates 48: monetary tightening for large and small firms - Shows difference (large difference for small firms) 52: example: Toll Brothers- purchased enough land so we can build for next 5-10 years - Already secured inventory for future
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Unformatted text preview: 53: change interest rate today affect output next year and inflations two years from now-Typically adjust price when new line is introduced-Always worry about competition 55: peak effect realized almost after 2 years inflation effect1-3 years, total effect realized after 3 years 59: B) shift fallen output back a year C) inflation took two years to get to same as before 63: policy cannot change peoples behavior quicklytime lags= very influential 64: expenditure shock has no long run effect but there is volatility 68: monetary policy generally what we rely on to offset expenditure shocks-Inside lag: one need to consider the most 71: outside lag for spending part= longer than expected...
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