100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary + answers to problem sets EC2B5 $15.13
Add to cart
Quickly navigate to
Preview
  2.  
  3. London School Of Economics (LSE)
  4.  
  5. EC2B5 (EC2B5)

Summary

Summary + answers to problem sets EC2B5
 0 purchase
  • Course
  • EC2B5 (EC2B5)
  • Institution
  • London School Of Economics (LSE)

Summary of all concepts described below, including content from background readings and lines of arguments to be made for answers on exam. Revision of basic concepts: * IS-LM Model, * AD-AS Model, * Philips Curve. Week 1: Class questions and answers Central banks: * Why does pol...

[Show more]

Preview 4 out of 66  pages

Document information

  • May 8, 2024
  • 66
  • 2022/2023
  • Summary

Subjects

  • is lm model
  • ad as model
  • philips curve
  • central banks
  • ec2b5 half unit macroeconomics ii
  • global financial crisis of 2007 09
  • consequences of financial crises
  • unconventional tools of monetary policy
  • c

Written for

  • London School of Economics (LSE)
  • Unknown
  • EC2B5 (EC2B5)
All documents for this subject (1)

Seller

avatar-seller
mraawolfensberger

Reviews received

Content preview

EC230




EC230
SUMMARY LENT TERM

,Table of Contents

Topic 0: Revision of basic concepts 4
IS-LM Model 4
AD-AS Model 6
Philips Curve 8
Week 1: Class questions and answers 9

Topic 1 – Central banks 11
Why does political control of monetary policy harm long-run economic performance? 11
Why did the UK govt. grant independence to the BoE in 1997? 12
Why do many developed countries have inflation targeting? 13
What are the recent developments in the Philips curve? 14
Week 2: Readings 15
Bernanke, B. and Mishkin, F. (1997) ‘inflation targeting: a new framework for monetary policy’ in Journal of
Economic Perspectives 11(2) 97-116 15
Week 2: Class questions and answers 16

Topic 2 – Global financial crisis of 2007-09 22
Financial Crises – Causes 22
Interplay between credit boom & speculative house price bubbles 22
Anatomy of an asset price bubble 22
The role of banks – the interplay of credit and asset boom 23
Role for policy 24
Price Stability -Financial Stability model 26

Week 3: Readings 27
Bean, C. (x) The Future of monetary policy – Speech 27
Week 3 – class questions 28
Financial Crises – Consequences 33
What caused the subprime mortgage crisis? 33
Consequences of subprime mortgage crisis on banks 34
Consequences for the real economy 35
How has financial regulation been reformed in the aftermath of the crisis? 36
Week 4 readings 37
The Economists (2013) Calling to Accounts: Making Banks Safe 37
Week 4 class questions 38
Unconventional Tools of Monetary Policy 42
Quantitative Easing 42
Forward guidance 45

Readings 46
The Economists: QE, or not QE?; Quantitative Easing 46




2

,Topic 3 – Exchange rates and currency crises 47
Fixed and Floating exchange rates 47
Week 6 class questions 50
Currency crises 51
Topic 4 – Currency unions 53
Currency unions – Euro VS the dollar 53
What makes a good currency union? 53
Why has the US been a more successful currency union than the Eurozone? 56
What were the causes of the European debt crisis?57
How did it influence the Brexit vote? 58

Topic 5 – Greek debt crisis 60
Topic 6: Growth Policy Error! Bookmark not defined.
All figures Error! Bookmark not defined.




3

, Topic 0: Revision of basic concepts


IS-LM Model
Assumes closed economy.
Helps understand the effects of macroeconomic shocks and how fiscal
monetary policy can stabilise the economy in the face of these shocks
I = investments L = Liquidity
S = savings M = money
= goods market = money market
ð Equilibrium income (Y) ð Equilibrium interest rate (r)
Shows how income, consumption and investment behave after a shock,
moving back to the short-term equilibrium.




The money-market (LM curve) equilibrium requires a situation where money
supply = money demand, where:
Money supply is all money circulating in the economy, which is a fixed amount,
set by the Central Bank (CB).
Money demand is derived from Keynes’ liquidity preference theory, which
theorises the equilibrium between interest rate and the amount of money
demanded:




4

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller mraawolfensberger. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $15.13. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

68175 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling
$15.13
  • (0)
Add to cart
Added