Inflation: Are Higher Prices the Only Problem?
... Tell students they must be aware of some important relationships while doing their investigations. • Average price changes do not alter a country’s ability to produce real goods and services. Real resources, like land, labor, and capital, remain available for use to produce goods and services. • G ...
... Tell students they must be aware of some important relationships while doing their investigations. • Average price changes do not alter a country’s ability to produce real goods and services. Real resources, like land, labor, and capital, remain available for use to produce goods and services. • G ...
DP2008/09 Analysing shock transmission in a data-rich Chris Bloor and Troy Matheson
... on a Bayesian approach for analysing the impact of shocks for New Zealand, leaving the analysis of factor-augmented VARs for future work. In addition to using New Zealand data, we extend the work of Banbura et al (2007) along several dimensions. We augment the Banbura et al (2007) prior with the cop ...
... on a Bayesian approach for analysing the impact of shocks for New Zealand, leaving the analysis of factor-augmented VARs for future work. In addition to using New Zealand data, we extend the work of Banbura et al (2007) along several dimensions. We augment the Banbura et al (2007) prior with the cop ...
Stabilisation policy under Romer IS-MP-IA
... MP is the Taylor rule, which describes the interest-rate policy rule that the central bank (CB) follows. The parameter φπ describes the response of the CB to deviations of inflation from the target inflation rate. Likewise, φy is the response of the CB to output gap fluctuations. a1 contains the nat ...
... MP is the Taylor rule, which describes the interest-rate policy rule that the central bank (CB) follows. The parameter φπ describes the response of the CB to deviations of inflation from the target inflation rate. Likewise, φy is the response of the CB to output gap fluctuations. a1 contains the nat ...
Two View ofthe Effects of Governemnt Budget Deficits in the 1980s
... Deficits, according to most popular analyses, raise aggregate demand for goods, services and cr’edit, which boosts output, emplovment~ prices and interest rates and reduces pr’ivate investment. This article examines the empirical and theoretical basis of this mainstream view. It also presents an alt ...
... Deficits, according to most popular analyses, raise aggregate demand for goods, services and cr’edit, which boosts output, emplovment~ prices and interest rates and reduces pr’ivate investment. This article examines the empirical and theoretical basis of this mainstream view. It also presents an alt ...
Inflation and Economic Growth in India – An Empirical Analysis
... universal, but appear only over the ―threshold‖ level of inflation. Nevertheless, there is the growing concern in developed countries; particularly in the EMU area that excessively low inflation threshold may hurt economic growth. It is argued that the developed countries do have very well developed ...
... universal, but appear only over the ―threshold‖ level of inflation. Nevertheless, there is the growing concern in developed countries; particularly in the EMU area that excessively low inflation threshold may hurt economic growth. It is argued that the developed countries do have very well developed ...
NBER WORKING PAPER SERIES ARE COUNTERCYCLICAL FISCAL POLICIES COUNTERPRODUCTIVE? David B. Gordon
... run to changes in government expenditures and taxes. But in economic downturns, countercyclical policies increase government indebtedness, raising future debt service obligations. These new expenditure commitments must be financed by some mix of higher taxes, lower spending, or higher money growth i ...
... run to changes in government expenditures and taxes. But in economic downturns, countercyclical policies increase government indebtedness, raising future debt service obligations. These new expenditure commitments must be financed by some mix of higher taxes, lower spending, or higher money growth i ...
(AS) Curve
... Why the Particular Shape? • As the overall economy is using all its capital and all the labor that wants to work at the market wage at Y , • increased demand for labor and output can be met only by increased prices. • At low levels of output, the A S curve is flatter. Small price increases may be as ...
... Why the Particular Shape? • As the overall economy is using all its capital and all the labor that wants to work at the market wage at Y , • increased demand for labor and output can be met only by increased prices. • At low levels of output, the A S curve is flatter. Small price increases may be as ...
Inflation and Other Risks of Unsound Money
... the money supply. Where a deficit is funded by selling bonds to the public, then there is no net increase in the money supply and hence no inflation. However, if the government deficit is part (or all) financed by money printing, this is inflationary as it increases the money supply. Similarly if th ...
... the money supply. Where a deficit is funded by selling bonds to the public, then there is no net increase in the money supply and hence no inflation. However, if the government deficit is part (or all) financed by money printing, this is inflationary as it increases the money supply. Similarly if th ...
Causes of Inflation in Turkey: A Literature Survey with
... clearly one-time increases in the price level.1 If equilibrium price level in a domestic market for goods and services rises continuously as a result of continued excess demand conditions in successive time periods, then economists speak in general from demand-pull inflation. In this case ...
... clearly one-time increases in the price level.1 If equilibrium price level in a domestic market for goods and services rises continuously as a result of continued excess demand conditions in successive time periods, then economists speak in general from demand-pull inflation. In this case ...
PROGRESS TOWARDS CONVERGENCE 1996
... different paces during the course of 1996, and the gap in relation to the reference value narrowed. The difference between inflation in the United Kingdom and the reference value was smaller than in the other countries throughout 1996, and has narrowed slightly in recent months. In explaining the co ...
... different paces during the course of 1996, and the gap in relation to the reference value narrowed. The difference between inflation in the United Kingdom and the reference value was smaller than in the other countries throughout 1996, and has narrowed slightly in recent months. In explaining the co ...
29.3 aggregate demand
... the same. Other things remaining the same, • When the price level rises, the quantity of real GDP supplied increases. • When the price level falls, the quantity of real GDP supplied decreases. ...
... the same. Other things remaining the same, • When the price level rises, the quantity of real GDP supplied increases. • When the price level falls, the quantity of real GDP supplied decreases. ...
Uncertainty Shocks in a Model of Effective Demand No. 12-15
... intuition, simple competitive business-cycle models do not exhibit movements in “the demand for labor” as a result of an uncertainty shock. However, uncertainty shocks easily cause fluctuations in the demand for labor in non-competitive, sticky price models with endogenously-varying markups. Thus, t ...
... intuition, simple competitive business-cycle models do not exhibit movements in “the demand for labor” as a result of an uncertainty shock. However, uncertainty shocks easily cause fluctuations in the demand for labor in non-competitive, sticky price models with endogenously-varying markups. Thus, t ...
Inflation and Growth: An Estimate of the Threshold Level of Inflation
... (APEC) countries, indicate that the reduction of high and medium inflation (double digits) to moderate single digit figures has a significant positive effect on growth for the OECD countries, and to a lesser extent for the APEC countries. They further add that the effect of an expected deceleration ...
... (APEC) countries, indicate that the reduction of high and medium inflation (double digits) to moderate single digit figures has a significant positive effect on growth for the OECD countries, and to a lesser extent for the APEC countries. They further add that the effect of an expected deceleration ...
The labyrinth: how can Latin America and the Caribbean navigate
... monetary policy arguing that the trade-offs have become harsher. In the past, the larger economies have used the exchange rate to react to negative shocks. However, with inflation close to or above targets in a number of countries, and potential concerns over balance sheets, monetary policy may be r ...
... monetary policy arguing that the trade-offs have become harsher. In the past, the larger economies have used the exchange rate to react to negative shocks. However, with inflation close to or above targets in a number of countries, and potential concerns over balance sheets, monetary policy may be r ...
This PDF is a selection from a published volume from... National Bureau of Economic Research
... the Korean economy.4 The pre-crisis sample period is 1987:I to 1997:IV and post-crisis sample period is 2000:I to 2009:I. The division is also helpful to compare the effects of the recent oil price hike from the previous ones before the 1990s. We first show the means and standard deviations of the lo ...
... the Korean economy.4 The pre-crisis sample period is 1987:I to 1997:IV and post-crisis sample period is 2000:I to 2009:I. The division is also helpful to compare the effects of the recent oil price hike from the previous ones before the 1990s. We first show the means and standard deviations of the lo ...
05 Economic Development - Perth and Kinross Council
... ED3 recognises that some rural locations are appropriate for tourism and rural based businesses. However, they seek the strengthening of Policy ED3 in terms of its support not only for ‘new tourism related development’, but also to existing tourism related developments, particularly where it can be ...
... ED3 recognises that some rural locations are appropriate for tourism and rural based businesses. However, they seek the strengthening of Policy ED3 in terms of its support not only for ‘new tourism related development’, but also to existing tourism related developments, particularly where it can be ...
Animal Spirits and the International Transmission of Business Cycles
... business cycle components exceeding 0.9. On average we find that this correlation coefficient is 0.82, suggesting a very high degree of synchronization of the business cycles within the Eurozone. This ...
... business cycle components exceeding 0.9. On average we find that this correlation coefficient is 0.82, suggesting a very high degree of synchronization of the business cycles within the Eurozone. This ...
BEING KEYNESIAN IN THE SHORT TERM AND CLASSICAL IN
... and the capacity utilization rates are “normal.” The short-term equilibrium is a standard multi-sectorial Keynesian-Kaleckian equilibrium: any prices, profit rates, and capacity utilization rates may prevail, and the equilibrium between the supply and demand of the various commodities results from t ...
... and the capacity utilization rates are “normal.” The short-term equilibrium is a standard multi-sectorial Keynesian-Kaleckian equilibrium: any prices, profit rates, and capacity utilization rates may prevail, and the equilibrium between the supply and demand of the various commodities results from t ...
Local copy
... commodity prices might be particularly good indicators because they are highly responsive to changing economic conditions. Similarly, during the U.S. stock market boom of the 1990s, some economists called for Fed tightening to dampen “asset price in ation,” suggesting that the right index for monet ...
... commodity prices might be particularly good indicators because they are highly responsive to changing economic conditions. Similarly, during the U.S. stock market boom of the 1990s, some economists called for Fed tightening to dampen “asset price in ation,” suggesting that the right index for monet ...
Improving EWIs for banking crises - satisfying policy requirements Abstract:
... EWIs, as well as providing confidence intervals and hypothesis tests. The second issue that we raise concerns the timing and consistency of the EWI. On the one hand, it needs to signal impeding crises sufficiently early. Because of long lags between the times that a signal is observed, policy action ...
... EWIs, as well as providing confidence intervals and hypothesis tests. The second issue that we raise concerns the timing and consistency of the EWI. On the one hand, it needs to signal impeding crises sufficiently early. Because of long lags between the times that a signal is observed, policy action ...
test #1 production possibilities / growth / circular flow
... e) to lower taxes and reduce the role of government 12) the circular flow of economic activity between consumers and producers includes which of the following I. households buy factor services from firms II. households sell factor services to firms III. households buy outputs from firms IV. househo ...
... e) to lower taxes and reduce the role of government 12) the circular flow of economic activity between consumers and producers includes which of the following I. households buy factor services from firms II. households sell factor services to firms III. households buy outputs from firms IV. househo ...
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.Further goals of a monetary policy are usually to contribute to economic growth and stability, to lower unemployment, and to maintain predictable exchange rates with other currencies.Monetary economics provides insight into how to craft optimal monetary policy.Monetary policy is referred to as either being expansionary or contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in order to avoid the resulting distortions and deterioration of asset values.Monetary policy differs from fiscal policy, which refers to taxation, government spending, and associated borrowing.