macroeconomicandindustryanalysis(编辑修改稿)

macroeconomicandindustryanalysis(编辑修改稿)内容摘要：

into the strength of the economy can be gleaned from the unemployment rate for other factors of production. Analysts also look at the factory capacity utilization rate, which is the ratio of actual output from factories to potential output.InflationThe rate at which the general level of prices rise is called inflation The rate at which the general level of prices for goods and services is rising.. High rates of inflation often are associated with “overheated” economies, that is, economies where the demand for goods and services is outstripping productive capacity, which leads to upward pressure on prices. Most governments walk a fine line in their economic policies. They hope to stimulate their economies enough to maintain nearly full employment, but not so much as to bring on inflationary pressures. The perceived tradeoff between inflation and unemployment is at the heart of many macroeconomic policy disputes. There is considerable room for disagreement as to the relative costs of these policies as well as the economy39。 s relative vulnerability to these pressures at any particular time.Interest RatesHigh interest rates reduce the present value of future cash flows, thereby reducing the attractiveness of investment opportunities. For this reason, real interest rates are key determinants of business investment expenditures. Demand for housing and highpriced consumer durables such as automobiles, which are monly financed, also is highly sensitive to interest rates because interest rates affect interest payments. (In Chapter 5, Section , we examined the determinants of interest rates.)Budget DeficitThe budget deficit The amount by which government spending exceeds government revenues. of the federal government is the difference between government spending and revenues. Any budgetary shortfall must be offset by government borrowing. Large amounts of government borrowing can force up interest rates by increasing the total demand for credit in the economy. Economists generally believe excessive government borrowing will “crowd out” private borrowing and investing by forcing up interest rates and choking off business investment.p. 553SentimentConsumers39。 and producers39。 optimism or pessimism concerning the economy is an important determinant of economic performance. If consumers have confidence in their future ine levels, for example, they will be more willing to spend on bigticket items. Similarly, businesses will increase production and inventory levels if they anticipate higher demand for their products. In this way, beliefs influence how much consumption and investment will be pursued and affect the aggregate demand for goods and services.CONCEPTCHECK1Consider an economy where the dominant industry is automobile production for domestic consumption as well as export. Now suppose the auto market is hurt by an increase in the length of time people use their cars before replacing them. Describe the probable effects of this change on (a) GDP, (b) unemployment, (c) the government budget deficit, and (d) interest rates. Demand and Supply ShocksA useful way to organize your analysis of the factors that might influence the macroeconomy is to classify any impact as a supply or demand shock. A demand shock An event that affects the demand for goods and services in the economy. is an event that affects the demand for goods and services in the economy. Examples of positive demand shocks are reductions in tax rates, increases in the money supply, increases in government spending, or increases in foreign export demand. A supply shock An event that influences production capacity and costs in the economy. is an event that influences production capacity and costs. Examples of supply shocks are changes in the price of imported oil。 freezes, floods, or droughts that might destroy large quantities of agricultural crops。 changes in the educational level of an economy39。 s workforce。 or changes in the wage rates at which the labor force is willing to work.Demand shocks are usually characterized by aggregate output moving in the same direction as interest rates and inflation. For example, a big increase in government spending will tend to stimulate the economy and increase GDP. It also might increase interest rates by increasing the demand for borrowed funds by the government as well as by businesses that might desire to borrow to finance new ventures. Finally, it could increase the inflation rate if the demand for goods and services is raised to a level at or beyond the total productive capacity of the economy.Supply shocks are usually characterized by aggregate output moving in the opposite direction of inflation and interest rates. For example, a big increase in the price of imported oil will be inflationary because costs of production will rise, which eventually will lead to increases in prices of finished goods. The increase in inflation rates over the near term can lead to higher nominal interest rates. Against this background, aggregate output will be falling. With raw materials more expensive, the productive capacity of the economy is reduced, as is the ability of individuals to purchase goods at nowhigher prices. GDP, therefore, tends to fall.How can we relate this framework to investment analysis? You want to identify the industries that will be most helped or hurt in any macroeconomic scenario you envision. For example, if you forecast a tightening of the money supply, you might want to avoid industries such as automobile producers that might be hurt by the likely increase in interest rates. We caution you again that these forecasts are no easy task. Macroeconomic predictions are notoriously unreliable. And again, you must be aware that in all likelihood your forecast will be made using only publicly available information. Any investment advantage you have will be a result only of better analysis—not better information. Federal Government Policyp. 554As the previous sect。