Core Inflation: Concepts, Uses and Measurement
... First, as Keynes notes “[c]hanges in relative prices may, of course, affect partial indexnumbers which represent price changes in particular classes of things, e.g. the index of the cost of living of the working classes.”12 Since all price indices produced by statistical agencies can be regarded as ...
... First, as Keynes notes “[c]hanges in relative prices may, of course, affect partial indexnumbers which represent price changes in particular classes of things, e.g. the index of the cost of living of the working classes.”12 Since all price indices produced by statistical agencies can be regarded as ...
Core inflation: a critical guide
... The term ‘core inflation’ is widely used by academics and central bankers. But despite its prevalence, there is neither a commonly accepted theoretical definition nor an agreed method of measuring it. Some researchers, for example, have suggested that core inflation relates to the growth rate of the ...
... The term ‘core inflation’ is widely used by academics and central bankers. But despite its prevalence, there is neither a commonly accepted theoretical definition nor an agreed method of measuring it. Some researchers, for example, have suggested that core inflation relates to the growth rate of the ...
Lesson Plans Grade 11 Microeconomics Grade 12 Macroeconomics
... d. Parts C and D can be used to illustrate the notion of opportunity cost. They also provide an opportunity to illustrate how marginal analysis can be used to avoid all-or-nothing thinking. It’s not so much “Are you for Mathematics (defense) or are you for Economics (social security)?” Rather, it is ...
... d. Parts C and D can be used to illustrate the notion of opportunity cost. They also provide an opportunity to illustrate how marginal analysis can be used to avoid all-or-nothing thinking. It’s not so much “Are you for Mathematics (defense) or are you for Economics (social security)?” Rather, it is ...
Mind the gap: the arms length principle and MNE value
... Multinational enterprises (MNEs) operating by way of wholly owned subsidiaries are responsible for an increasing percentage of global trade. This paper looks at how the existing rules based on the arm’s length principle allocate a MNE’s profit between the taxing jurisdictions in which it operates. I ...
... Multinational enterprises (MNEs) operating by way of wholly owned subsidiaries are responsible for an increasing percentage of global trade. This paper looks at how the existing rules based on the arm’s length principle allocate a MNE’s profit between the taxing jurisdictions in which it operates. I ...
www.gloomboomdoom.com
... The world is in the midst of the worst economic slump since the Great Depression. Economic policy responses were unprecedented coordinated fiscal and monetary measures. Will they help or aggravate and prolong the crisis? How long will it take for the world to return to peak economic activity of 2006 ...
... The world is in the midst of the worst economic slump since the Great Depression. Economic policy responses were unprecedented coordinated fiscal and monetary measures. Will they help or aggravate and prolong the crisis? How long will it take for the world to return to peak economic activity of 2006 ...
Prices Are Sticky After All
... A widely held view in macroeconomics is that monetary policy can be effective primarily because aggregate prices are sticky; when monetary policy changes, the aggregate price level cannot respond quickly enough to offset the intended real effects. This price stickiness is clearly at the heart of th ...
... A widely held view in macroeconomics is that monetary policy can be effective primarily because aggregate prices are sticky; when monetary policy changes, the aggregate price level cannot respond quickly enough to offset the intended real effects. This price stickiness is clearly at the heart of th ...
The Elusive Costs of Inflation
... also essentially flat. There is, thus, no evidence that prices deviated more from their optimal level during the Great Inflation period when inflation was running at higher than 10% per year than during the more recent period when inflation has been close to 2% per year. We conclude from this that t ...
... also essentially flat. There is, thus, no evidence that prices deviated more from their optimal level during the Great Inflation period when inflation was running at higher than 10% per year than during the more recent period when inflation has been close to 2% per year. We conclude from this that t ...
A Primer on Inflation
... a sustained increase in the aggregate price level causing a fall in the purchasing power of money. The analysis of the price mechanism is a fundamental contribution of economists to the understanding of the workings of our society. Adam Smith helped us understand the price mechanism. If workers, lan ...
... a sustained increase in the aggregate price level causing a fall in the purchasing power of money. The analysis of the price mechanism is a fundamental contribution of economists to the understanding of the workings of our society. Adam Smith helped us understand the price mechanism. If workers, lan ...
CA DISCLOSURE.xls - ECB Banking Supervision
... - Leverage ratios are currently not binding, are displayed for information purposes only and have no impact on the capital shortfall - Due to the ‘static balance sheet’ assumption used as part of the Stress Test, the leverage ratio might be misleading for the Stress Tests and is therefore displayed ...
... - Leverage ratios are currently not binding, are displayed for information purposes only and have no impact on the capital shortfall - Due to the ‘static balance sheet’ assumption used as part of the Stress Test, the leverage ratio might be misleading for the Stress Tests and is therefore displayed ...
Kad Brunner*
... they cannot account for the central core of the differences which involve substantive and basic cognitive issues. Some of these issues actually reach well beyond the range addressed in earlier disputes and express fundamental aspects of our perception pertaining to man and society. A central questio ...
... they cannot account for the central core of the differences which involve substantive and basic cognitive issues. Some of these issues actually reach well beyond the range addressed in earlier disputes and express fundamental aspects of our perception pertaining to man and society. A central questio ...
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... this reason, the characteristics of price adjustment have long been an important topic in empirical macroeconomics. Following the seminar work of Bils and Klenow (2004) this area has been especially active over the past decade and a great deal has been learned. In this article, we review the empiric ...
... this reason, the characteristics of price adjustment have long been an important topic in empirical macroeconomics. Following the seminar work of Bils and Klenow (2004) this area has been especially active over the past decade and a great deal has been learned. In this article, we review the empiric ...
The Contributions of Milton Friedman to Economics
... Because economics is a discipline that advances through debate and diversity of views, it is hard to account for the near-consensus in macroeconomics in the post-war period and also the antagonism that met Friedman’s challenge to that consensus. In order to place his ideas in perspective, this secti ...
... Because economics is a discipline that advances through debate and diversity of views, it is hard to account for the near-consensus in macroeconomics in the post-war period and also the antagonism that met Friedman’s challenge to that consensus. In order to place his ideas in perspective, this secti ...
Economic Commentaries
... rate of increase in a broad price index, while the New Keynesian theory advocates stabilising a narrower index. But arguments are also expressed in favour of stabilising an index that disregards temporary price fluctuations or changes in prices that cannot be influenced by monetary policy, such as i ...
... rate of increase in a broad price index, while the New Keynesian theory advocates stabilising a narrower index. But arguments are also expressed in favour of stabilising an index that disregards temporary price fluctuations or changes in prices that cannot be influenced by monetary policy, such as i ...
Inflation Targeting
... influence short-term market interest rates. By influencing short-term interest rates, the BSP is able to affect the demand of households and firms for various goods and services. Domestic demand and the aggregate supply of goods and services determine the general price level. In addition, as the Phi ...
... influence short-term market interest rates. By influencing short-term interest rates, the BSP is able to affect the demand of households and firms for various goods and services. Domestic demand and the aggregate supply of goods and services determine the general price level. In addition, as the Phi ...
NBER WORKING PAPER SERIES Michael B. Devereux
... But in our quantitative decomposition of the volatility of net external assets, the latter channel plays at best a small role. The biggest driver of the volatility of net external assets is the unanticipated movement in returns, holding the portfolio constant. Portfolio adjustment and movements in e ...
... But in our quantitative decomposition of the volatility of net external assets, the latter channel plays at best a small role. The biggest driver of the volatility of net external assets is the unanticipated movement in returns, holding the portfolio constant. Portfolio adjustment and movements in e ...
Informational Frictions and Commodity Markets
... literature, cannot be taken as evidence to reject the presence of any speculative effect during the period. Finally, by systematically illustrating that prices of key industrial commodities can serve as price signals for the strength of the global economy and that informational noise in commodity pr ...
... literature, cannot be taken as evidence to reject the presence of any speculative effect during the period. Finally, by systematically illustrating that prices of key industrial commodities can serve as price signals for the strength of the global economy and that informational noise in commodity pr ...
Free Full Text ( Final Version , 817kb )
... China has made great achievement in maintaining price stability and generating economic momentum during the post-reform period, even as China has experienced 3 times’ high inflation attacks and 3 times acute deflation. Recently, inflation has become the hottest economic topic again and China’s leade ...
... China has made great achievement in maintaining price stability and generating economic momentum during the post-reform period, even as China has experienced 3 times’ high inflation attacks and 3 times acute deflation. Recently, inflation has become the hottest economic topic again and China’s leade ...
to - The Money Enigma
... money and inflation, not make predictions. However, the theories developed in these papers do highlight the very real risk of a severe and sudden increase in the inflation rate. • In the case of the United States, a massive increase in the monetary base has had little impact on the value of the US D ...
... money and inflation, not make predictions. However, the theories developed in these papers do highlight the very real risk of a severe and sudden increase in the inflation rate. • In the case of the United States, a massive increase in the monetary base has had little impact on the value of the US D ...
Block I - Bhoj University
... This is because the higher price will attract more providers who seek to make a profit on the good or service. By the same token a low price will not attract additional suppliers and as a result the overall supply will remain low. These two laws help to determine the overall price level of a product ...
... This is because the higher price will attract more providers who seek to make a profit on the good or service. By the same token a low price will not attract additional suppliers and as a result the overall supply will remain low. These two laws help to determine the overall price level of a product ...
Monetary Policy - Central Bank of Nigeria
... the quantity, cost and availability of money credit in order to achieve desired macroeconomic objectives of internal and external balances. The action is carried out through changing money supply and/or interest rates with the aim of managing the quantity of money in the economy. The importance of m ...
... the quantity, cost and availability of money credit in order to achieve desired macroeconomic objectives of internal and external balances. The action is carried out through changing money supply and/or interest rates with the aim of managing the quantity of money in the economy. The importance of m ...
Exploring the Dynamics of Global Liquidity
... capture movements in the globally available funding. In recent years, much work has focused on capturing the role of the shadow banking system. Adrian, Ashcraft, Boesky and Poszar (2010) find that the volume of credit intermediated by the shadow banking system has far exceeded that of the traditiona ...
... capture movements in the globally available funding. In recent years, much work has focused on capturing the role of the shadow banking system. Adrian, Ashcraft, Boesky and Poszar (2010) find that the volume of credit intermediated by the shadow banking system has far exceeded that of the traditiona ...
The Contemporaneous Correlation Between
... export data and the rates on treasury securities come from International Financial Statistics (on CD-rom). The remaining data comes from Citibase. The relative price of oil is included because several economists have focused on its role in recessions (see Hamilton (1983) for example). The federal fu ...
... export data and the rates on treasury securities come from International Financial Statistics (on CD-rom). The remaining data comes from Citibase. The relative price of oil is included because several economists have focused on its role in recessions (see Hamilton (1983) for example). The federal fu ...
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... model with a fixed menu cost over the entire sample period can match the empirical relationship between the frequency of price change and inflation. Menu costs are, of course, a veil for a variety of deeper frictions in the price adjustment process arising from technological, managerial, or customer ...
... model with a fixed menu cost over the entire sample period can match the empirical relationship between the frequency of price change and inflation. Menu costs are, of course, a veil for a variety of deeper frictions in the price adjustment process arising from technological, managerial, or customer ...
Fiscal and Monetary Policies The Nominal Anchor
... The Classical Dichotomy (long-run neutrality of money) implied that the long-run equilibrium values of real variables (e.g., employment, output, real interest rates) don’t depend on monetary conditions The Quantity Theory of Money (MV = PY ) was typically the link between the money supply and the pr ...
... The Classical Dichotomy (long-run neutrality of money) implied that the long-run equilibrium values of real variables (e.g., employment, output, real interest rates) don’t depend on monetary conditions The Quantity Theory of Money (MV = PY ) was typically the link between the money supply and the pr ...
Monetary policy trade-offs and forward guidance
... This proposition linking Bank Rate and asset sales to the unemployment threshold would cease to hold if any of the following three ‘knockouts’ were breached: in the MPC’s view, it is more likely than not that CPI inflation 18 to 24 months ahead will be 0.5 percentage points or more above the 2% ta ...
... This proposition linking Bank Rate and asset sales to the unemployment threshold would cease to hold if any of the following three ‘knockouts’ were breached: in the MPC’s view, it is more likely than not that CPI inflation 18 to 24 months ahead will be 0.5 percentage points or more above the 2% ta ...
Economic bubble
An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is trade in an asset at a price or price range that strongly deviates from the corresponding asset's intrinsic value. It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.Because it is often difficult to observe intrinsic values in real-life markets, bubbles are often conclusively identified only in retrospect, when a sudden drop in prices appears. Such a drop is known as a crash or a bubble burst. Both the boom and the burst phases of the bubble are examples of a positive feedback mechanism, in contrast to the negative feedback mechanism that determines the equilibrium price under normal market circumstances. Prices in an economic bubble can fluctuate erratically, and become impossible to predict from supply and demand alone.While some economists deny that bubbles occur, the cause of bubbles remains disputed by those who are convinced that asset prices often deviate strongly from intrinsic values. Many explanations have been suggested, and research has recently shown that bubbles may appear even without uncertainty, speculation, or bounded rationality. In such cases, the bubbles may be argued to be rational, where investors at every point fully compensated for the possibility that the bubble might collapse by higher returns. These approaches require that the timing of the bubble collapse can only be forecast probabilistically and the bubble process is often modelled using a Markov switching model. It has also been suggested that bubbles might ultimately be caused by processes of price coordination or emerging social norms.