货币金融学What-Is-MoneyPPT课件.ppt

Copyright 2010 Pearson Addison-Wesley.All rights reserved.货币货币金融学金融学What Is MoneyCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-2Meaning of MoneyWhat is it?Money(or the“money supply”):anything that is generally accepted in payment for goods or services or in the repayment of debts.A rather broad definitionCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-3Meaning of MoneyMoney(a stock concept)is different from:Wealth:the total collection of pieces of property that serve to store valueIncome:flow of earnings per unit of time(a flow concept)Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-4Functions of MoneyMedium of Exchange:Eliminates the trouble of finding a double coincidence of needs(reduces transaction costs)Promotes specializationA medium of exchange mustbe easily standardizedbe widely acceptedbe divisiblebe easy to carrynot deteriorate quicklyCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-5Functions of MoneyUnit of Account:used to measure value in the economyreduces transaction costsStore of Value:used to save purchasing power over time.other assets also serve this function Money is the most liquid of all assets but loses value during inflationCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-6Evolution of the Payments SystemCommodity Money:valuable,easily standardized and divisible commodities(e.g.precious metals,cigarettes).Fiat Money:paper money decreed by governments as legal tender.Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-7Evolution of the Payments SystemChecks:an instruction to your bank to transfer money from your accountElectronic Payment(e.g.online bill pay).E-Money(electronic money):Debit cardStored-value card(smart card)E-cash Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-8Measuring MoneyHow do we measure money?Which particular assets can be called“money”?Construct monetary aggregates using the concept of liquidity:M1(most liquid assets)=currency+travelers checks+demand deposits+other checkable deposits.Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-9Measuring MoneyM2(adds to M1 other assets that are not so liquid)=M1+small denomination time deposits+savings deposits and money market deposit accounts+money market mutual fund shares.Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-10Table 1 Measures of the Monetary AggregatesCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-11Monetary AggregatesCurrencyTravelers ChecksDemand DepositsOther Check.DepM1(4)M2(4+3)M3(4+3+4)Small Den.Dep.Savings and MMMoney Market Mutual Funds SharesCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-12M1 vs.M2Does it matter which measure of money is considered?M1 and M2 can move in different directions in the short run(see figure).Conclusion:the choice of monetary aggregate is important for policymakers.Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-13FIGURE 1 Growth Rates of the M1 and M2 Aggregates,19602008Sources:Federal Reserve Bulletin,p.A4,Table 1.10,various issues;Citibase databank;www.federalreserve.gov/releases/h6/hist/h6hist1.txt.Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-14How Reliable are the Money Data?Revisions are issued because:Small depository institutions report infrequentlyAdjustments must be made for seasonal variationWe probably should not pay much attention to short-run movements in the money supply numbers,but should be concerned only with longer-run movementsCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-15Table 2 Growth Rate of M2:Initial and Revised Series,2008(percent,compounded annual rate)Copyright 2010 Pearson Addison-Wesley.All rights reserved.Chapter 4Understanding Interest RatesCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-17Present ValueA dollar paid to you one year from now is less valuable than a dollar paid to you todayWhy?A dollar deposited today can earn interest and become$1 x(1+i)one year from today.Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-18Discounting the FutureCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-19Simple Present ValueCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-20Time Line$100$100Year01PV1002$100$100n100/(1+i)100/(1+i)2100/(1+i)nCannot directly compare payments scheduled in different points in the time lineCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-21Four Types of Credit Market InstrumentsSimple LoanFixed Payment LoanCoupon BondDiscount BondCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-22Yield to MaturityThe interest rate that equates the present value of cash flow payments received from a debt instrument with its value todayCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-23Simple LoanCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-24Fixed Payment LoanCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-25Coupon BondCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-26When the coupon bond is priced at its face value,the yield to maturity equals the coupon rateThe price of a coupon bond and the yield to maturity are negatively relatedThe yield to maturity is greater than the coupon rate when the bond price is below its face valueTable 1 Yields to Maturity on a 10%-Coupon-Rate Bond Maturing in Ten Years(Face Value=$1,000)Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-27Consol or PerpetuityA bond with no maturity date that does not repay principal but pays fixed coupon payments foreverFor coupon bonds,this equation gives the current yield,an easy to calculate approximation to the yield to maturityCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-28Discount BondCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-29Rate of ReturnCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-30Rate of Return and Interest RatesThe return equals the yield to maturity only if the holding period equals the time to maturityA rise in interest rates is associated with a fall in bond prices,resulting in a capital loss if time to maturity is longer than the holding periodThe more distant a bonds maturity,the greater the size of the percentage price change associated with an interest-rate changeCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-31Rate of Return and Interest Rates(contd)The more distant a bonds maturity,the lower the rate of return the occurs as a result of an increase in the interest rateEven if a bond has a substantial initial interest rate,its return can be negative if interest rates rise Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-32Table 2 One-Year Returns on Different-Maturity 10%-Coupon-Rate Bonds When Interest Rates Rise from 10%to 20%Copyright 2010 Pearson Addison-Wesley.All rights reserved.3-33Interest-Rate RiskPrices and returns for long-term bonds are more volatile than those for shorter-term bondsThere is no interest-rate risk for any bond whose time to maturity matches the holding periodCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-34Real and Nominal Interest RatesNominal interest rate makes no allowance for inflationReal interest rate is adjusted for changes in price level so it more accurately reflects the cost of borrowingEx ante real interest rate is adjusted for expected changes in the price levelEx post real interest rate is adjusted for actual changes in the price levelCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-35Fisher EquationCopyright 2010 Pearson Addison-Wesley.All rights reserved.3-36FIGURE 1 Real and Nominal Interest Rates(Three-Month Treasury Bill),19532008Sources:Nominal rates from www.federalreserve.gov/releases/H15.The real rate is constructed using the procedure outlined in Frederic S.Mishkin,“The Real Interest Rate:An Empirical Investigation,”Carnegie-Rochester Conference Series on Public Policy 15(1981):151200.This procedure involves estimating expected inflation as a function of past interest rates,inflation,and time trends and then subtracting the expected inflation measure from the nominal interest rate.