宏观经济学原理第五版英文原版课件macroch13presentation

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1、 2009 South-Western,a part of Cengage Learning,all rights reservedC H A P T E RSaving,Investment,and the Financial SystemMacroeonomicsP R I N C I P L E S O FP R I N C I P L E S O FN.Gregory MankiwPremium PowerPoint Slides by Ron Cronovich13In this chapter,look for the answers to these questions:What

2、 are the main types of financial institutions in the U.S.economy,and what is their function?What are the three kinds of saving?Whats the difference between saving and investment?How does the financial system coordinate saving and investment?How do govt policies affect saving,investment,and the inter

3、est rate?1 1Financial InstitutionsThe financial system:the group of institutions that helps match the saving of one person with the investment of another.Financial markets:institutions through which savers can directly provide funds to borrowers.Examples:The Bond Market.A bond is a certificate of in

4、debtedness.The Stock Market.A stock is a claim to partial ownership in a firm.2Financial InstitutionsFinancial intermediaries:institutions through which savers can indirectly provide funds to borrowers.Examples:Banks Mutual funds institutions that sell shares to the public and use the proceeds to bu

5、y portfolios of stocks and bonds3Different Kinds of SavingPrivate saving =The portion of households income that is not used for consumption or paying taxes=Y T CPublic saving=Tax revenue less government spending=T G 4National SavingNational saving =private saving+public saving=(Y T C)+(T G)=Y C G=th

6、e portion of national income that is not used for consumption or government purchases5Saving and InvestmentRecall the national income accounting identity:Y=C+I+G+NX For the rest of this chapter,focus on the closed economy case:Y=C+I+GSolve for I:I =Y C G=(Y T C)+(T G)Saving=investment in a closed ec

7、onomynational saving6Budget Deficits and SurplusesBudget surplus=an excess of tax revenue over govt spending=T G =public savingBudget deficit=a shortfall of tax revenue from govt spending=G T =(public saving)7Suppose GDP equals$10 trillion,consumption equals$6.5 trillion,the government spends$2 tril

8、lion and has a budget deficit of$300 billion.Find public saving,taxes,private saving,national saving,and investment.A C T I V E L E A R N I N G A C T I V E L E A R N I N G 1 1 A.Calculations8 8Given:Y=10.0,C=6.5,G=2.0,G T=0.3Public saving =T G =0.3Taxes:T=G 0.3=1.7Private saving=Y T C=10 1.7 6.5=1.8

9、National saving=Y C G=10 6.5=2=1.5Investment=national saving=1.5A C T I V E L E A R N I N G A C T I V E L E A R N I N G 1 1 Answers,part A9 9Use the numbers from the preceding exercise,but suppose now that the government cuts taxes by$200 billion.In each of the following two scenarios,determine what

10、 happens to public saving,private saving,national saving,and investment.1.Consumers save the full proceeds of the tax cut.2.Consumers save 1/4 of the tax cut and spend the other 3/4.A C T I V E L E A R N I N G A C T I V E L E A R N I N G 1 1 B.How a tax cut affects saving1010In both scenarios,public

11、 saving falls by$200 billion,and the budget deficit rises from$300 billion to$500 billion.1.If consumers save the full$200 billion,national saving is unchanged,so investment is unchanged.2.If consumers save$50 billion and spend$150 billion,then national saving and investment each fall by$150 billion

12、.A C T I V E L E A R N I N G A C T I V E L E A R N I N G 1 1 Answers,part B1111The two scenarios from this exercise were:1.Consumers save the full proceeds of the tax cut.2.Consumers save 1/4 of the tax cut and spend the other 3/4.Which of these two scenarios do you think is more realistic?Why is th

13、is question important?A C T I V E L E A R N I N G A C T I V E L E A R N I N G 1 1 C.Discussion questions1212The Meaning of Saving and InvestmentPrivate saving is the income remaining after households pay their taxes and pay for consumption.Examples of what households do with saving:Buy corporate bon

14、ds or equitiesPurchase a certificate of deposit at the bankBuy shares of a mutual fundLet accumulate in saving or checking accounts13The Meaning of Saving and InvestmentInvestment is the purchase of new capital.Examples of investment:General Motors spends$250 million to build a new factory in Flint,

15、Michigan.You buy$5000 worth of computer equipment for your business.Your parents spend$300,000 to have a new house built.Remember:In economics,investment is NOT the purchase of stocks and bonds!14The Market for Loanable FundsA supply-demand model of the financial systemHelps us understandhow the fin

16、ancial system coordinates saving&investmenthow govt policies and other factors affect saving,investment,the interest rate15The Market for Loanable FundsAssume:only one financial marketAll savers deposit their saving in this market.All borrowers take out loans from this market.There is one interest r

17、ate,which is both the return to saving and the cost of borrowing.16The Market for Loanable FundsThe supply of loanable funds comes from saving:Households with extra income can loan it out and earn interest.Public saving,if positive,adds to national saving and the supply of loanable funds.If negative

18、,it reduces national saving and the supply of loanable funds.17The Slope of the Supply CurveInterestRateLoanable Funds($billions)SupplyAn increase in the interest rate makes saving more attractive,which increases the quantity of loanable funds supplied.603%806%18The Market for Loanable FundsThe dema

19、nd for loanable funds comes from investment:Firms borrow the funds they need to pay for new equipment,factories,etc.Households borrow the funds they need to purchase new houses.19The Slope of the Demand CurveInterestRateLoanable Funds($billions)DemandA fall in the interest rate reduces the cost of b

20、orrowing,which increases the quantity of loanable funds demanded.507%4%8020EquilibriumInterestRateLoanable Funds($billions)DemandThe interest rate adjusts to equate supply and demand.SupplyThe eqm quantity of L.F.equals eqm investment and eqm saving.5%6021Policy 1:Saving IncentivesInterestRateLoanab

21、le Funds($billions)D1Tax incentives for saving increase the supply of L.F.S15%60S2which reduces the eqm interest rateand increases the eqm quantity of L.F.4%7022Policy 2:Investment IncentivesInterestRateLoanable Funds($billions)D1An investment tax credit increases the demand for L.F.S15%60which rais

22、es the eqm interest rateand increases the eqm quantity of L.F.6%70D223Use the loanable funds model to analyze the effects of a government budget deficit:Draw the diagram showing the initial equilibrium.Determine which curve shifts when the government runs a budget deficit.Draw the new curve on your

23、diagram.What happens to the equilibrium values of the interest rate and investment?A C T I V E L E A R N I N G A C T I V E L E A R N I N G 2 2 Exercise2424A C T I V E L E A R N I N G A C T I V E L E A R N I N G 2 2 Answers25InterestRateLoanable Funds($billions)D1A budget deficit reduces national sav

24、ing and the supply of L.F.S15%60S2which increases the eqm interest rateand decreases the eqm quantity of L.F.and investment.6%5025Budget Deficits,Crowding Out,and Long-Run GrowthOur analysis:Increase in budget deficit causes fall in investment.The govt borrows to finance its deficit,leaving less fun

25、ds available for investment.This is called crowding out.Recall from the preceding chapter:Investment is important for long-run economic growth.Hence,budget deficits reduce the economys growth rate and future standard of living.26The U.S.Government DebtThe government finances deficits by borrowing(se

26、lling government bonds).Persistent deficits lead to a rising govt debt.The ratio of govt debt to GDP is a useful measure of the governments indebtedness relative to its ability to raise tax revenue.Historically,the debt-GDP ratio usually rises during wartime and falls during peacetime until the earl

27、y 1980s.27U.S.Government Debt as a Percentage of GDP,1970-2007Revolutionary WarCivil WarWW1WW22828CONCLUSIONLike many other markets,financial markets are governed by the forces of supply and demand.One of the Ten Principles from Chapter 1:Markets are usually a good way to organize economic activity.

28、Financial markets help allocate the economys scarce resources to their most efficient uses.Financial markets also link the present to the future:They enable savers to convert current income into future purchasing power,and borrowers to acquire capital to produce goods and services in the future.29CH

29、APTER SUMMARYThe U.S.financial system is made up of many types of financial institutions,like the stock and bond markets,banks,and mutual funds.National saving equals private saving plus public saving.In a closed economy,national saving equals investment.The financial system makes this happen.3030CH

30、APTER SUMMARYThe supply of loanable funds comes from saving.The demand for funds comes from investment.The interest rate adjusts to balance supply and demand in the loanable funds market.A government budget deficit is negative public saving,so it reduces national saving,the supply of funds available to finance investment.When a budget deficit crowds out investment,it reduces the growth of productivity and GDP.3131