EC250 Study Guide - Final Guide: European Central Bank, Janet Yellen, Balanced Budget
Document Summary
New york times prediction on how janet yellen will run the us monetary policy. She is all for transparency and relatively simple rules. A careful deliberate approach is what is needed at the central bank. Fama thinks markets are rational and professional money managers are monkeys throwing darts. Shiller thinks that this is not true and there are bubbles in the stock market (as well as in the housing market) caused by irrational behaviour of investors. In shiller"s view, prices tend to the average price/earning ratio & house prices to the long-run average proportion of income. Shiller predicts that house prices in the us will fall. The absolute purchasing power parity does not hold between canada and the. Prices of many goods and services are, at current exchange rate, higher in. It is blamed on tariffs and non-competitive behaviour. Government promised balanced budget in normal times.
