Inflation During and After the Zero Lower Bound
... turn out to be a curse for policy makers, because the same monetary policy action of, say, changing interest rates or making announcements about targeted inflation rates, may have very different effects, depending on the equilibrium. However, there is also an opportunity for policy making: actions a ...
... turn out to be a curse for policy makers, because the same monetary policy action of, say, changing interest rates or making announcements about targeted inflation rates, may have very different effects, depending on the equilibrium. However, there is also an opportunity for policy making: actions a ...
What has Happened to Monetarism? An Investigation into the
... rejecting the idea that velocity might be some "natural constant," an overstatement of the quantity theory which had contributed to its downfall, Friedman (1956, 21) refers to the "extraordinary empirical stability and regularity" of income velocity--when properly specified as a stable function of c ...
... rejecting the idea that velocity might be some "natural constant," an overstatement of the quantity theory which had contributed to its downfall, Friedman (1956, 21) refers to the "extraordinary empirical stability and regularity" of income velocity--when properly specified as a stable function of c ...
Can global economic conditions explain low New Zealand inflation? AN2015/03
... Monetary policy is always set in an environment of significant uncertainty. At the same time, monetary policy takes 18-24 months to have its full effect on economic activity and inflation. Consequently, the Bank uses economic forecasts to guide policy decisions. It is inevitable, however, that there ...
... Monetary policy is always set in an environment of significant uncertainty. At the same time, monetary policy takes 18-24 months to have its full effect on economic activity and inflation. Consequently, the Bank uses economic forecasts to guide policy decisions. It is inevitable, however, that there ...
NBER WORKING PAPER SERIES THE BARNETT CRITIQUE AFTER THREE DECADES:
... resolve the merits of simple-sum versus superlative indexes of money on the basis of goodnessof-fit criteria or have judged money not to be an important variable when a simple-sum measure alone was used in empirical work, the current paper shows that, with a model fully-specified at the level of ta ...
... resolve the merits of simple-sum versus superlative indexes of money on the basis of goodnessof-fit criteria or have judged money not to be an important variable when a simple-sum measure alone was used in empirical work, the current paper shows that, with a model fully-specified at the level of ta ...
The New IS-LM Model: Language, Logic, and Limits
... • Limits on monetary policy: There are two limits on monetary policy emphasized by this model. First, the monetary authority cannot engineer a permanent departure of output from its capacity level. Second, monetary policy rules must be restricted if there is to be a unique rational expectations equi ...
... • Limits on monetary policy: There are two limits on monetary policy emphasized by this model. First, the monetary authority cannot engineer a permanent departure of output from its capacity level. Second, monetary policy rules must be restricted if there is to be a unique rational expectations equi ...
An Empirical Analysis on Excessive Reserves in U.S Banking
... creates a snowball effect: if one lender believes that his or her borrowers are not creditworthy enough, he or she would cut loans made to such borrowers. These borrowers, due to the cut back of loans, will now face difficulties in funding, and thus become truly somewhat not creditworthy. These diff ...
... creates a snowball effect: if one lender believes that his or her borrowers are not creditworthy enough, he or she would cut loans made to such borrowers. These borrowers, due to the cut back of loans, will now face difficulties in funding, and thus become truly somewhat not creditworthy. These diff ...
Multiple-choice questions to accompany
... c) an increase in the participation rate d) an increase in the number of discouraged workers 3. "In any economic slowdown, the unemployment rate rises, first and foremost, because employment growth slows or actually goes into negative territory. But how high the jobless rate goes can also depend ver ...
... c) an increase in the participation rate d) an increase in the number of discouraged workers 3. "In any economic slowdown, the unemployment rate rises, first and foremost, because employment growth slows or actually goes into negative territory. But how high the jobless rate goes can also depend ver ...
Real wages, inflation and labour productivity in Australia
... some of the previous empirical studies have been conducted using cointegration analysis with small sample sizes. This may significantly distort the power of the standard tests and lead to misguided conclusions. Third, most empirical studies have ignored the role of real wages on the relationship bet ...
... some of the previous empirical studies have been conducted using cointegration analysis with small sample sizes. This may significantly distort the power of the standard tests and lead to misguided conclusions. Third, most empirical studies have ignored the role of real wages on the relationship bet ...
A Primer on Inflation
... economy, rendering decision-making and forward planning by consumers, businesses, and government difficult. Eventually, inflation may strain a country’s social fabric as each group in society competes with other groups to ensure its wages are keeping up with the rising level of prices. The social an ...
... economy, rendering decision-making and forward planning by consumers, businesses, and government difficult. Eventually, inflation may strain a country’s social fabric as each group in society competes with other groups to ensure its wages are keeping up with the rising level of prices. The social an ...
Inflation
... of 7% on a loan. The expected inflation rate is 5%. This means the bank expects to make a real profit of 2% (7% - 5%). • Suppose there is unexpected inflation, adding another 1% to inflation (6% total). The bank will now make a profit of just 1%. Inflation hurt the bank! • Borrowers, in this case, e ...
... of 7% on a loan. The expected inflation rate is 5%. This means the bank expects to make a real profit of 2% (7% - 5%). • Suppose there is unexpected inflation, adding another 1% to inflation (6% total). The bank will now make a profit of just 1%. Inflation hurt the bank! • Borrowers, in this case, e ...
This PDF is a selection from a published volume from
... forecasts of the GDP growth rate and inflation comparable with the Greenbook forecasts and a forecast of the federal funds rate up to two quarters ahead, which is in line with that of the future market. Our analysis extends the forecasting exercise conducted in Bernanke and Boivin (2003) and Stock a ...
... forecasts of the GDP growth rate and inflation comparable with the Greenbook forecasts and a forecast of the federal funds rate up to two quarters ahead, which is in line with that of the future market. Our analysis extends the forecasting exercise conducted in Bernanke and Boivin (2003) and Stock a ...
Macro-economics of balance-sheet problems and the
... needed. These risks, however, are less relevant when balance-sheet problems are severe and when the economy reached the zero lower bound. The business cycle can be determined with less uncertainty, since the economy is typically in a slump as long as the interest rate is at the zero lower bound and ...
... needed. These risks, however, are less relevant when balance-sheet problems are severe and when the economy reached the zero lower bound. The business cycle can be determined with less uncertainty, since the economy is typically in a slump as long as the interest rate is at the zero lower bound and ...
NBER WORKING PAPER SERIES ADJUSTING DEPRECIATION IN AN INFLATIONARY
... this paper show that this rise in the net cost can be quite substantial at recent inflation rates; e.g., the real net cost of an equipment investment with a 13 year tax life is raised 21 percent by an 8 percent expected inflation rate if the firm uses a 4 percent real discount rate. The effects of i ...
... this paper show that this rise in the net cost can be quite substantial at recent inflation rates; e.g., the real net cost of an equipment investment with a 13 year tax life is raised 21 percent by an 8 percent expected inflation rate if the firm uses a 4 percent real discount rate. The effects of i ...
Economics 101 Homework Assignments Spring
... rapid rate (hyperinflation) while prices in the United States were hardly rising at all. Second, for a variety of reasons, those who had made portfolio investments in Russia decided to take their money elsewhere. This means that they demanded that the loans they had made in Russia be paid off. When ...
... rapid rate (hyperinflation) while prices in the United States were hardly rising at all. Second, for a variety of reasons, those who had made portfolio investments in Russia decided to take their money elsewhere. This means that they demanded that the loans they had made in Russia be paid off. When ...
Article - The relationship between resource utilisation and inflation
... tends to be high when economic activity is strong and low when economic activity is weak. There is extensive literature in this field and a long line of studies of the relationship have been made over the years, but with varying results. In later studies, however, the conclusion has generally be ...
... tends to be high when economic activity is strong and low when economic activity is weak. There is extensive literature in this field and a long line of studies of the relationship have been made over the years, but with varying results. In later studies, however, the conclusion has generally be ...
Introduction - Geist Science
... aggregate demand (AD) is exceeded as compared to aggregate supply (AS). There is an increase in aggregate demand (AD) categorized through four sectors of the economy such as business, households, foreign buyers and Government. Cost Push Inflation is occurred in the economy when there is an increase ...
... aggregate demand (AD) is exceeded as compared to aggregate supply (AS). There is an increase in aggregate demand (AD) categorized through four sectors of the economy such as business, households, foreign buyers and Government. Cost Push Inflation is occurred in the economy when there is an increase ...
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... that countries whose real exchange rates are subject to greater real disturbances are more likely to float their currencies (incidentally, this possibility was also acknowledged by Mussa). This is the so-called “real economy view”. Stockman (1988) further develops his equilibrium model of exchange ...
... that countries whose real exchange rates are subject to greater real disturbances are more likely to float their currencies (incidentally, this possibility was also acknowledged by Mussa). This is the so-called “real economy view”. Stockman (1988) further develops his equilibrium model of exchange ...
12 INFLATION
... very easy to do, simply in terms of an expected inflation rate, an agreed money wage, and then what the actual real wage will be if the actual inflation rate is different. The effects in the capital market are not quite as obvious, but are easily demonstrated with the impact of unanticipated inflati ...
... very easy to do, simply in terms of an expected inflation rate, an agreed money wage, and then what the actual real wage will be if the actual inflation rate is different. The effects in the capital market are not quite as obvious, but are easily demonstrated with the impact of unanticipated inflati ...
Chapter 4 Inflation and Deflation
... inflation, nor is there a common agrteement on what constitutes acceptable levels of inflation, bad inflation, or hyperinflation. Generally it can be said that inflation is a measure of a general increase of the price level in an economy, as represented typically by an inclusive price index, such as ...
... inflation, nor is there a common agrteement on what constitutes acceptable levels of inflation, bad inflation, or hyperinflation. Generally it can be said that inflation is a measure of a general increase of the price level in an economy, as represented typically by an inclusive price index, such as ...
Review of the literature on the comparison of price level targeting
... level targeting has a number of different costs and benefits compared with inflation targeting. For example, price level targeting offers the potential benefit of delivering greater ...
... level targeting has a number of different costs and benefits compared with inflation targeting. For example, price level targeting offers the potential benefit of delivering greater ...