L11 Econ 1021 Chapter Notes - Chapter 8: Loanable Funds, Nominal Interest Rate, Negative Number
28 Apr 2017
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Called the unit"s balance sheet: savings is a flow, a measure that is defined per unit of time (e. g. , mr. a saves /month; S: total s = private s + public s, savings trends, trends in us saving, national savings rate long term downward trend, but upward since recession for. June 2009 recession: lower income during recession means lower taxes collected: tax reductions during the first bush term, government spending increased: wars in iraq and afghanistan, homeland. Investment called k inflow: us savings can flow out to finance foreign investment called k outflow, nci = net capital inflow = total inflow of foreign funds minus total outflow of. R s: generally sub. effect > wealth effect. If r is above equilibrium, a surplus of savings will exist. Crowding out private expenditure investment (negatively effects future growth: the real interest rate + fischer effect, demand for loanable funds vs. supply of loanable funds (fischer effect revisited)
