Government bonds in the context of "Coupon (finance)"

In macroeconomics, an open market operation (OMO) is an activity by a central bank to exchange liquidity in its currency with a bank or a group of banks. The central bank can either transact government bonds and other financial assets in the open market or enter into a repurchase agreement or secured lending transaction with a commercial bank. The latter option, often preferred by central banks, involves them making fixed period deposits at commercial banks with the security of eligible assets as collateral.

Central banks regularly use OMOs as one of their tools for implementing monetary policy. A frequent aim of open market operations is — aside from supplying commercial banks with liquidity and sometimes taking surplus liquidity from commercial banks — to influence the short-term interest rate. Open market operations have become less prominent in this respect since the 2008 financial crisis, however, as many central banks have changed their monetary policy implementation to a so-called floor system (or system of ample reserves), in which there is abundant liquidity in the payments system. In that situation central banks no longer need to fine tune the supply of reserves to meet demand, implying that they may conduct OMOs less frequently. For countries operating under an exchange rate anchor, direct intervention in the foreign exchange market, which is a specific type of open market operations, may be an important tool to maintain the desired exchange rate.

Decree 900 (Spanish: Decreto 900), also known as the Agrarian Reform Law, was a Guatemalan land-reform law passed on June 17, 1952, during the Guatemalan Revolution. The law was introduced by President Jacobo Árbenz Guzmán and passed by the Guatemalan Congress. It redistributed unused land greater than 90 hectares (224 acres) in area to local peasants, compensating landowners with government bonds. Land from at most 1,700 estates was redistributed to about 500,000 individuals—one-sixth of the country's population. The goal of the legislation was to move Guatemala's economy from pseudo-feudalism into capitalism. Although in force for only eighteen months, the law had a major effect on the Guatemalan land-reform movement.

Indigenous groups, deprived of land since the Spanish conquest, were major beneficiaries of the decree. In addition to raising agricultural output by increasing the cultivation of land, the reform is credited with helping many Guatemalans find dignity and autonomy. The expropriation of land led major landowners–including the United Fruit Company–to lobby the United States government to intervene by construing the Guatemalan government as communist. Decree 900 was thus a direct impetus for the 1954 coup d'état, which deposed Árbenz and instigated decades of civil war.

In economics, the Pigou effect is the stimulation of output and employment caused by increasing consumption due to a rise in real balances of wealth, particularly during deflation. The term was named after Arthur Cecil Pigou by Don Patinkin in 1948.

Real wealth was defined by Arthur Cecil Pigou as the summation of the money supply and government bonds divided by the price level. He argued that Keynes' General Theory was deficient in not specifying a link from "real balances" to current consumption and that the inclusion of such a "wealth effect" would make the economy more "self correcting" to drops in aggregate demand than Keynes predicted. Because the effect derives from changes to the "Real Balance", this critique of Keynesianism is also called the Real Balance effect.

In macroeconomic theory, liquidity preference is the demand for money, considered as liquidity. The concept was first developed by John Maynard Keynes in his book The General Theory of Employment, Interest and Money (1936) to explain the determination of the interest rate by the supply and demand for money.The liquidity preference theory by Keynes was a refinement of Silvio Gesell's theory that interest is caused by the store of value function of money.

The demand for money as an asset was theorized to depend on the interest foregone by not holding bonds (here, the term "bonds" can be understood to also represent stocks and other less liquid assets in general, as well as government bonds). Interest rates, he argues, cannot be a reward for saving as such because, if a person hoards his savings in cash, keeping it under his mattress say, he will receive no interest, although he has nevertheless refrained from consuming all his current income. Instead of a reward for saving, interest, in the Keynesian analysis, is a reward for parting with liquidity. According to Keynes, money is the most liquid asset. Liquidity is a potentially valuable attribute of an asset, in circumstances requiring cash money to meet obligations or contingencies. The more quickly an asset can be converted into cash money at or near the present value of its expected long-term cash flow, the more liquid it is said to be.