Lecture10 - Announcements Today Unemployment Read Mankiw Ch...

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Announcements Today Unemployment. Read Mankiw, Ch 6 Readings on Ctools Next week Economic growth. Read Mankiw, Ch 7 No sections today and tomorrow No lecture Tuesday Midterm will be returned after break
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Review: Current high gold price High expected inflation? Or low real interest rates Arbitrage valuation of gold δ + = ++ 1 1 (1 ) Gold Gold tt PP r Another record price today Likely expectation of further Fed asset purchases Æ lower long-term interest rates
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Home foreclosure moratorium • Foreclosure moratorium – Banks filling inaccurate paperwork – Ceasing foreclosure • Likely effect – Delay foreclosures • Fewer now •Mo re la te r • Likely effect on prices?
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Application of arbitrage argument δ + ⎛⎞ Δ +− ⎜⎟ ⎝⎠ 1 Implicit rent = H H t t H t P Pr P Compare actual rent to implicit rent of owning Purchase price Interest Depreciation/ Maintenance Price appreciation Rotating price path down makes purchase now less attractive
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Unemployment • Steady-state unemployment
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This note was uploaded on 12/31/2011 for the course ECON 402 taught by Professor House during the Fall '08 term at University of Michigan.

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Lecture10 - Announcements Today Unemployment Read Mankiw Ch...

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