Capital Markets Presentation

Capital Markets. Some Useful Terminology. Nipa accounts. Interest Rates. Interest RatesThe Yield Curve. Yield Curves. Interest RatesInterest Rates. Real vs. Nominal Interest Rates. Real/Nominal Interest Rates. Real vs. Nominal Interest Rates. Present Value. Income vs. Wealth. Household Savings. A two period example. Consumption Possibilities. Borrowing to increase current consumption. Consumption Possibilities. Borrowing Limits. Consumption Possibilities. Saving to increase future consumption. Consumption Possibilities. Maximizing future consumption. Consumption Possibilities. Suppose that the interest rate rises to 8%. Consumption Possibilities. The interest rate. How does rising interest rates influence savings decisions? Impact of rising interest rates. Aggregate Savings. Again, assume that the interest rate is 5%, consider two individuals. Consumption vs. Wealth. Consumption and Wealth. Consumption vs. Wealth. Again, assume that the interest rate is 5%, consider two individuals. Consumption and Wealth. Suppose that economic growth in the US rises. Technology & Investment Demand. Production Technology. Production (Holding Employment FixedMarginal Product of Capital. Diminishing marginal product implies that as the capital stock rises. Marginal Product and Investment Demand. A Numerical example. Interest rates and Investment. Interest rates and investment. Interest rates and Investment. Interest rates and investment. Interest rates and Investment. Investment Demand. A rise in investment demand. Capital Market Equilibrium. Example Post-war Germany. ExampleThe Bubonic Plague. Temporary vs. Permanent Shocks.