Lectures in Macroeconomics- Charles W. Upton Calculating with our Money Demand Function Part 1 r N = r R +  e + r R  e

Calculating with our Money Demand Function The Basic Model

Calculating with our Money Demand Function The Consumption Fraction

Calculating with our Money Demand Function Period 1

Calculating with our Money Demand Function Period 1

Calculating with our Money Demand Function Period 2

Calculating with our Money Demand Function Period 3

Calculating with our Money Demand Function Period 4

Calculating with our Money Demand Function An Illustration y 2 =$300,000, y 3 =$630,000, y 1 =y 4 =0 r R = 50%,  e =50%  = 1/3

Calculating with our Money Demand Function An Illustration y 2 =$300,000, y 3 =$630,000, y 1 =y 4 =0 r R = 50%,  e =50%  = 1/3

Calculating with our Money Demand Function An Illustration y 2 =$300,000, y 3 =$630,000, y 1 =y 4 =0 r R = 50%,  e =50%  = 1/3

Calculating with our Money Demand Function Real and Nominal Rates y 2 =$300,000, y 3 =$630,000, y 1 =y 4 =0 r R = 50%,  e =50%  = 1/3 r N = r R +  e + r R  e

Calculating with our Money Demand Function Fisher’s Law y 2 =$300,000, y 3 =$630,000, y 1 =y 4 =0 r R = 50%,  e =50%  = 1/3 r N = r R +  e + r R  e (Irving) Fisher’s Law

Calculating with our Money Demand Function Fisher’s Law r N = r R +  e + r R  e r N = (0.50) +(0.50) +(0.50)(0.50) = 1.25

Calculating with our Money Demand Function End ©2004 Charles W. Upton. All rights reserved