Money Growth and Inflation- Macro Topic 5.3

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  • Опубліковано 21 вер 2024
  • In this video I explain the difference between the money market and the loanable funds market and explain why one of them is labeled nominal interest rate and the other is labeled REAL interest rate.
    I also show how both graphs are related to each other and how they can shift in the short run and in the long run. In the bonus round I talk about the natural rate or interest and the Swedish economist Knut Wicksell. Sverige är bäst
    Please keep in mind that this video is designed for students that have already learned these concepts and graphs. If it goes over your head, please go back and watch the Macro Unit 4 Summary Video or the videos below.
    Thank you so much for watching my videos and subscribing to my channel. You rock!
    Do you need help in your macro class?
    Please check out my Ultimate Review Packet. It has everything you need including practice questions access to additional practice videos. Here is the link:
    www.acdcecon.co...

КОМЕНТАРІ • 116

  • @JacobAClifford
    @JacobAClifford  6 років тому +187

    What do you think? Was this video helpful? Let me know.

    • @NeufStudios
      @NeufStudios 6 років тому +4

      Love when you produce vids on these more advanced topics! I've read a bit about r* but this makes the concept quite a bit clearer. Any willingness to do more vids of this type (or maybe a 200 level econ series?)

    • @k13dude
      @k13dude 6 років тому +4

      please more technical videos! really love your work, as an econ major and tutor, it has been some of the most helpful content on the web.

    • @ioanaturcan5702
      @ioanaturcan5702 6 років тому +1

      Very !!! Thank youu !

    • @shabnamsharminsharnali7717
      @shabnamsharminsharnali7717 6 років тому +2

      Your vdos have been really really helpful! Best teacher ever!! Keep on doing what you do ^_^

    • @danielche2349
      @danielche2349 6 років тому

      Yes! I had this question on my mind even before I saw this video!

  • @alanwu2213
    @alanwu2213 Рік тому +22

    Man Clifford is GOATED. I have a Macro final exam in 15 minutes and he's taught me more about monetary policy than my professor has in an entire semester.

  • @travismickle2849
    @travismickle2849 6 років тому +129

    another incoming wave of viewers as we study for this test.

  • @nanfeng6123
    @nanfeng6123 6 років тому +55

    That really solves my problem. I am not convenient to buy the packet but I really want to say something to support Mr. Clifford. Actually, the videos he gave us for free are just enough for study. There is no reason to criticize someone who really offers great help first and asks for some return which is certainly deserving.

  • @lemonscented6246
    @lemonscented6246 6 років тому +75

    literally have a test on this tomorrow i love u mr clifford

  • @marouanedoulal2038
    @marouanedoulal2038 4 роки тому +66

    2020 BOARD VICTIMS WHERE YOU AT???????

  • @nainakapil9292
    @nainakapil9292 6 років тому +39

    OMG...You are God of Economics!!!! how can your concepts be so impeccably clear?? where did you do your graduation from Professor??

  • @portiakarim427
    @portiakarim427 5 років тому +7

    I'm from South Africa and i use your videos to study macro economics, such a life saver. Than you so much for the work you do Jacob. Not all heroes wear capes

    • @Chillo56
      @Chillo56 5 років тому

      Portia Karim Ayyy UCT ECO1011S by any chance?? Haha probably not

    • @portiakarim427
      @portiakarim427 5 років тому

      @@Chillo56 lol nah UP Ekn 120 BUT GOOD GUESS.

  • @MemoMan217
    @MemoMan217 3 роки тому +17

    I know this is an old series and all but I just needed to say thank you. You have essentially been my teacher lately, and an amazing one at that.

  • @VIRALCATSR
    @VIRALCATSR 6 років тому +63

    Sir,
    thanks for sharing your knowledge with us. you are my favorite teacher

    • @armelamikli5299
      @armelamikli5299 6 років тому

      Abdul Rehman Baabar A highter supply of dollar in a country that uses yen currency cases a devaluation of dollar currency compared with other currency( yen currency).
      That cases that american product in your country(as america is a country that uses dollar currency) be cheaper in your country 'cuz as i said it has been a devaluation of dollar in exchange market.

    • @s7234
      @s7234 3 роки тому

      @@armelamikli5299 what the ...

  • @nikocvitanic7701
    @nikocvitanic7701 4 роки тому +2

    People like you make them world for round! I thank you with the most sincere heart.

  • @vigilantslacker6039
    @vigilantslacker6039 5 років тому +173

    I sincerely hope you know that you’re looked at as some sort of cult deity across American high schools everywhere. Seriously, ask any economics student if they know who Clifford is, and they’ll say something along the lines of “I owe everything to him”. Peace dude!!! 😂😂

  • @tylerzhang5442
    @tylerzhang5442 4 роки тому

    This difference in Nominal and Real has confused me for a VERY VERY LONG time which my teacher never cares to explain..... Thanks for the explanation!!!

  • @m_dreamer3628
    @m_dreamer3628 4 роки тому +6

    Thank you! You help so many students and even economics teachers.

  • @therealsamw
    @therealsamw 2 роки тому +1

    Greatest of all time, you are doing gods work for the students with bad professors thank you.

  • @stivicanka2703
    @stivicanka2703 3 роки тому +1

    We love you, Mr. Clifford!

  • @9678willy
    @9678willy 2 роки тому

    Studying whole new concept the night before the AP exam! LESGOBB!!!!

  • @terriweiss8293
    @terriweiss8293 6 років тому +5

    Loved the video. I made a note to show it when we finish both topics this year. I literally laughed out a loud when you spoke about the difference between theory and practical application; I had that discussion in my Macro class just today. Thanks for the video.

  • @fossilfighters101
    @fossilfighters101 6 років тому +12

    *YES MORE GRAPHS*

  • @DrDubMemes
    @DrDubMemes 2 роки тому +1

    Great video outlining these two models. I got some great info out of it, and it helps to have someone talented at explaining things clearly because teachers can be confusing at times.

  • @hatrang5143
    @hatrang5143 Рік тому +2

    Wish there could be a Jacob in each subjects that i have to deal at school😌

  • @linhnguyenduongthuy3951
    @linhnguyenduongthuy3951 6 років тому +1

    All of your videos help me go through my first year. From the bottom of my heart, thank you!

  • @paulk314
    @paulk314 6 років тому +4

    Nice video! Do you think that Hayek's stages of production has implications here? Since interest rates impact short and long term projects differently, lower interest rates will allow for a greater investment into longer-term projects (i.e. projects where the time delay between initial investment and ROI is great) than when interest interest rates are high. A fluctuating interest rate can wreak havoc on an advanced, industrial economy. It seems that aggregating concepts like "investment" without differentiating between short and long term investment can make this difficult to realize.

  • @kayleeejs
    @kayleeejs 3 роки тому +3

    i have a quiz on this in an hour

  • @alexryyan
    @alexryyan 2 роки тому

    Me watching in 2022 and hearing there is no inflation rn thinking *he doesnt know yet* LOL. Appreciate the videos alot! Helping me so much reviewing for the AP exam right now

  • @Jeremy-jc5th
    @Jeremy-jc5th 6 років тому +1

    And why would decrease in nominal interest rate cause real interest rate to go down? In the previous example we said that the real interest rate doesn't change (5%)?

  • @goyaldev09
    @goyaldev09 6 років тому +2

    U r a great teacher, wish i had u as my teacherr

  • @Violet-uf2ti
    @Violet-uf2ti 5 років тому +4

    Where did your 4.16 video go? It was so helpful :(

  • @000ppphan2
    @000ppphan2 5 років тому +1

    I think a lot of these introductory explanation on monetary stuff misses the mechanism that drives the short run and long run responses of people to monetary policy. At least that was how I felt when I first learn it.
    I think a particularly helpful illustration would be to stress the importance of stickiness of price in this picture. Stickiness of price and wage causes important fluctuation in the short run, from the goods market to labor market.

  • @cameronabernethy476
    @cameronabernethy476 6 років тому

    This was a great video, my man. Come to Raleigh North Carolina on your tour please! Thank for sharing your knowledge with the world.

  • @chriswyse3345
    @chriswyse3345 5 років тому +1

    This was the first video I watched of yours that I found confusing - specifically with regards to the Loanable Funds segment. If I understood you correctly, the Fisher Effect states that the Nominal Interest Rate is ACTUALLY the Real Interest Rate, because expectations about future inflation are constantly influencing the Nominal Interest Rate. Meaning, we don't need to adjust the Nominal Interest Rate for loans because the Nominal Interest Rate is already taking into account future expectations about inflation? ::confusing::

  • @flock221
    @flock221 6 років тому +2

    can you do a bigger analysis of the crowding out phenomenon?

  • @markharris2579
    @markharris2579 6 років тому

    Love you Mr. Clifford.

  • @Jeremy-jc5th
    @Jeremy-jc5th 6 років тому +1

    At 6:52 why does decrease in interest rate lead to more lending? Shouldn't investment increase, and the demand curve of loanable funds be the one shifting right? somebody pls help ;;

  • @TheSugar9005
    @TheSugar9005 5 років тому +1

    Why haven’t I been watching these before.....

  • @jaco200
    @jaco200 6 років тому

    You are my favourite teacher

  • @kenslylandry6655
    @kenslylandry6655 6 років тому

    These videos are the reason im going to pass my ap exam tomorrow, thank you so much

  • @wangyiyi3220
    @wangyiyi3220 4 роки тому +1

    could you please explain what you meant by "since that money has been used for transaction"(8:05)? And why does an increase in transaction costs causes the decrease of supplies?

    • @aussieanteater
      @aussieanteater 4 роки тому

      Because if the transaction costs increase it would be more costly to supply a product/service therefore there would be a decrease in supply. ( don't know if this would help )

  • @ilskanonskan
    @ilskanonskan 6 років тому

    Hey man, been watching a lot of your videos for an exam (Uni) to revise, but it seems you are missing the theories on IS-LM curves, goodsmarket and money market and its derrivation to the AS-AD curve and putting that together. Love the vids though!

  • @thesecretjin5988
    @thesecretjin5988 3 роки тому

    REALLY NEEDED THOSE SUBTITLES HEREEE

  • @SilentSapa
    @SilentSapa 6 років тому

    Hello Mr. Clifford. Did I understand you write, that there is no sense in showing the influence of the monetary policy on the LF graph as I has no influence on the real interest rate?

  • @charliejennifer3874
    @charliejennifer3874 6 років тому

    I'm confused in the loanable funds market...if interest rates increase won't the SLF increase and the DLF decrease?

  • @isabellazhang6296
    @isabellazhang6296 4 роки тому

    Thank you! WIll take AP 2 weeks later

  • @ilovefood9362
    @ilovefood9362 4 місяці тому

    You remind me so much of Marshall from HIMYM

  • @Alice-gl6um
    @Alice-gl6um 5 років тому +1

    I LOVE you videos!!!!

  • @adrianomattia5625
    @adrianomattia5625 6 років тому

    Hi, Mr Clifford. What do you think about the Austrian School views about manipulation of interest rates by central banks ad the source of the boom bust cycle.
    In their views, more money injected in the real loanable funds market, drives the i. rate down artificially stimulating consumption and investment.
    I suggest that you look for it.
    Thanks!

  • @sarimzahid3481
    @sarimzahid3481 4 роки тому

    Technical videos are awesome

  • @elaee527
    @elaee527 2 роки тому

    6:53 MS increase and ir will decrease, so why supply of loanable funds doesn't decrease?

  • @shamailajaved8027
    @shamailajaved8027 4 роки тому

    hey .I have been trying to look at the basic graphs on credit market but couldn't find any.can u please share since Iam new to this concept..thanx

  • @Klarissedoeslife
    @Klarissedoeslife 6 років тому +1

    Haven't seen your videos since graduating high school 2 years ago hah... How you doin with Malcolm passing away?

  • @josephamoako4963
    @josephamoako4963 Рік тому

    I really like your videos ✅♥️

  • @giselegiram
    @giselegiram 6 років тому +1

    A great video. Nice explanation.

  • @nainakapil9292
    @nainakapil9292 6 років тому +1

    I would like to meet you in person Professor. I am pursuing Masters at Sanford School of Public Policy, Duke University, Durham.

  • @hopematschner3715
    @hopematschner3715 4 роки тому

    I just don't understand why the formula for nominal interest rates adds in inflation when nominal interest rates don't account for inflation and real interest rates subtract out inflation when real interest rates account for inflation. please help me understand and comment back.

  • @sammypickell2543
    @sammypickell2543 6 років тому +3

    "in the LOOOOOONG run"

  • @betsywilliams9954
    @betsywilliams9954 4 роки тому

    my savior

  • @vawa_82
    @vawa_82 5 років тому

    Thank you!!!

  • @indomie8813
    @indomie8813 3 роки тому +2

    Lol ap macro tommorow

  • @marthamasinja2195
    @marthamasinja2195 6 років тому

    yes it is was helpful , i guess these concepts just need i little more practice

  • @henryacquah7763
    @henryacquah7763 6 років тому

    Good explanations

  • @julianaboujaoude2485
    @julianaboujaoude2485 3 роки тому

    KING

  • @VIRALCATSR
    @VIRALCATSR 6 років тому +4

    Sir,
    Please teach me that why some country's currency are much low values. like 1 Dollar= Japanese Yun 0.0096.

    • @yarkieee
      @yarkieee 6 років тому +2

      That's just relative to the American dollar. The yen just uses bigger amounts, but holds about the same buying power. So a $3 cup of coffee would be 330 yen in japan.

  • @muhammadsyukri2292
    @muhammadsyukri2292 2 роки тому

    Nice Video

  • @manwithnoname2355
    @manwithnoname2355 Рік тому

    Intro goes hard ngl

  • @jojochu9188
    @jojochu9188 4 роки тому

    Omg thank you

  • @MrSalad-om8td
    @MrSalad-om8td 2 роки тому

    Hi Im from the future. And inflation has been the highest in the past 40 years.

  • @vinacherviana6998
    @vinacherviana6998 6 років тому

    I don’t understand why the supply curve shift to left when charge the higher nominal interest rate? Is the quantity for loanable fund will decrease or remain the same?

    • @FrancescoBosco12
      @FrancescoBosco12 6 років тому

      Remember that people's expectations is a curve shifter. If people think inflation is gonna increase, lenders won't want to lend as much (since inflation effectively lowers the amount of money the make on loans) and borrowers want to borrow more because they have to effectively pay a lower interest rate on their loan. This double shift causes the nominal interest to increase so that the real interest rate remains the same as it was before and so the amount of loans exchanged in the market remains the same.

  • @fabiolalopez5585
    @fabiolalopez5585 Рік тому

    Fabi was here

  • @imeqa5409
    @imeqa5409 3 роки тому

    Haubner test tomorrow, and I'm screwed

  • @cyrussuleman1982
    @cyrussuleman1982 2 роки тому

    4:30

  • @yeahcolin
    @yeahcolin 4 роки тому

    I have never been more confused

  • @jeanclgn
    @jeanclgn 3 роки тому

    1:27

  • @Kristin-hn5eu
    @Kristin-hn5eu 6 років тому

    How old is this man

  • @naziazaman40
    @naziazaman40 5 років тому

    KNUTWICKSELL! 😂

  • @syedmuzammil2995
    @syedmuzammil2995 6 років тому

    You should reply

  • @GlenCheng
    @GlenCheng 4 роки тому

    "watch the unit 4 summary video"

    • @s7234
      @s7234 3 роки тому

      Yea its on the ultimate review packet, but not on yt :C

  • @chandanamr
    @chandanamr 6 років тому +1

    1

  • @zaitoven5166
    @zaitoven5166 6 років тому

    My nigga

  • @m_dreamer3628
    @m_dreamer3628 4 роки тому

    Thank you! You help so many students and even economics teachers.