1. Lectures in Macroeconomics- Charles W. Upton Lessons Learned

2. The Y and M Curves Y M PePe rere P With the Y and M curves we can see how different government policies impact P and r,

3. Lessons Learned The Christmas Eve Caper Y M PePe rere P If all assets are denominated in real terms the price level goes up in proportion to the increase in money.

4. Lessons Learned The Christmas Eve Caper Y M PePe rere P If all assets are denominated in real terms the price level goes up in proportion to the increase in money. If some assets are denominated in nominal terms the price level goes up.

5. Lessons Learned The Christmas Eve Caper Y M PePe rere P If all assets are denominated in real terms the price level goes up in proportion to the increase in money. If some assets are denominated in nominal terms the price level goes up. Over time, the price level rises in proportion to the increase in the money supply. Money is Neutral

6. Lessons Learned Some General Propositions In Mudville, Y R = 100 M S =100 V=1 P = 1

7. Lessons Learned Some General Propositions In Mudville, Y R = 100 M S =100 V=1 P = 1 Now Mudville doubles its money supply

8. Lessons Learned Prices in Mudville 1 2 t

9. Lessons Learned Prices and Interest Rates in Mudville 1 2 t t r

10. Lessons Learned Conclusions Money is Neutral –Not necessarily initially –But certainly over time

11. Lessons Learned A Temporary Spending Increase Y M PePe rere P P will rise, and perhaps r.

12. Lessons Learned A Temporary Spending Inrcrease Y M PePe rere P P will rise, and perhaps r. These effects are temporary.

13. Lessons Learned Prices in Spendville 1 2 t

14. Lessons Learned Prices and Interest Rates in Spendville t r 1 2 t

15. Lessons Learned Conclusions Temporary Programs Have Temporary Effects

16. Lessons Learned End ©2004 Charles W. Upton. All rights reserved