ECON 102 Chapter Notes - Chapter 25: Longrun
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ECON 102 Full Course Notes
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Short-run and long-run macroeconomic rate of inflation on and interest rates in canada. Canada"s central bank embarked on a policy designed to reduce the. Thiessen argued that the high nominal interest rates of the past. This connection between inflation and nominal interest rates is that inflation erodes the value of money. Lenders need to be compensated for the inflation-induced fall in the real value of their money between the time they lend it and the time they are repaid were caused mostly by high inflation effects of inflation. Requires charging a nominal interest rate high enough to cover the. Monetary policy designed to reduce inflation is usually effective precisely because it creates a temporary recession (shifts the ad curve and generates short-run changes in real gdp) Problem in 1990s: japan"s firms and consumers saved too much . Japan"s remarkable economic success in the 40 years following the.