Use the 3 -equation model to show the impact of a reduction in consumer confidence on the
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Use the 3 -equation model to show the impact of a reduction in consumer confidence on the economy. Make sure you show the period 1 mark-up on your diagram and discuss what happens to both the policy rate and the lending rate (as in Fig. 5.13). How would you expect a reduction in competition in the banking sector due to mergers between banks to affect the macro-economy?
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Macroeconomics Institutions Instability And The Financial System
ISBN: 9780199655793
1st Edition
Authors: Wendy Carlin, David Soskice
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