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Keynes (1936) said that shortage of money caused by hoarding or failure to invest led to unemployment, but Lucas (1972) said that money does not affect unemployment. The tables have now turned. Gani (2003) produced a model of indirect trade in which money is necessary as a means of payment....
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This paper develops a macroeconomic model of the response of interest rates to inflation expectations, with particular … real cost of capital to firms to rise, discouraging investment, and the after-tax real interest rate to savers to fall …
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illustrates their forecasting usefulness by drawing on experiences from the global financial crisis. Specific issues include the … roles of those factors in the pre-crisis bubble buildup, in shaping aggregate policy responses in the USA and Europe and in … shaping international coordination regarding long-term regulatory reform and preservation of free trade. A final illustration …
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The global crisis has not invalidated everything about macroeconomics. However, it has highlighted some of mistakes of …
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