Chapter 19 Output and Inflation in the Short Run: Aggregate Supply
... natural rate when people underestimate or overestimate the rate of inflation. This might seem to suggest that economic activity can only deviate from its long run trend for extended periods of time if expectations are ’sticky’ in the sense that economic agents keep on overestimating or underestimati ...
... natural rate when people underestimate or overestimate the rate of inflation. This might seem to suggest that economic activity can only deviate from its long run trend for extended periods of time if expectations are ’sticky’ in the sense that economic agents keep on overestimating or underestimati ...
Approximating Fixed-Horizon Forecasts Using Fixed-Event
... together with bias and correlation between true disagreement and disagreement based on the two approximations. ...
... together with bias and correlation between true disagreement and disagreement based on the two approximations. ...
Franz Seitz - OTH Amberg
... asymmetric effects. Otherwise monetary shocks have no real effects at all. In trying to identify asymmetric effects it is necessary to specify a central bank reaction function to assess the stance of monetary policy. Many of the above mentioned papers identify this stance using monetary aggregates a ...
... asymmetric effects. Otherwise monetary shocks have no real effects at all. In trying to identify asymmetric effects it is necessary to specify a central bank reaction function to assess the stance of monetary policy. Many of the above mentioned papers identify this stance using monetary aggregates a ...
the evolution of economic understanding
... capacity of the economy. It can thus be concluded that the apparent present trends in the economy simply extend themselves to over-reach comfortable capacity and that, accordingly, an inflation is inevitable. (Minutes, 8/2/55, p. 23) The 1956 Economic Report suggested a similar view when it discusse ...
... capacity of the economy. It can thus be concluded that the apparent present trends in the economy simply extend themselves to over-reach comfortable capacity and that, accordingly, an inflation is inevitable. (Minutes, 8/2/55, p. 23) The 1956 Economic Report suggested a similar view when it discusse ...
On the Desirability of Nominal GDP Targeting
... it has not been scrutinized within the context of the quantitative frameworks commonly used by central banks. The objective of this paper is to study the desirability of nominal GDP targeting within the context of a New Keynesian model with both price and wage rigidity. In particular, we compare the ...
... it has not been scrutinized within the context of the quantitative frameworks commonly used by central banks. The objective of this paper is to study the desirability of nominal GDP targeting within the context of a New Keynesian model with both price and wage rigidity. In particular, we compare the ...
Chapter 4: Money and Inflation
... all of the above plus arbitrary redistributions of wealth between debtors and creditors ...
... all of the above plus arbitrary redistributions of wealth between debtors and creditors ...
Chapter 1: Introduction
... This chapter has two major goals: to complete the construction of the sticky-price model begun in Chapter 9, and to link up the sticky-price macroeconomic model analysis of this section, Section IV, with the flexible-price macroeconomic model analysis of Section III. The key to accomplishing both of ...
... This chapter has two major goals: to complete the construction of the sticky-price model begun in Chapter 9, and to link up the sticky-price macroeconomic model analysis of this section, Section IV, with the flexible-price macroeconomic model analysis of Section III. The key to accomplishing both of ...
Budget deficits and inflation feedback
... Relation to some recent contributions The problem of dual equilibria in the ITLC has been extensively discussed in the literature. A prominent avenue of research is to use the more appealing assumption of adaptive learning instead of pure adaptive expectations. As was originally shown by Marcet and ...
... Relation to some recent contributions The problem of dual equilibria in the ITLC has been extensively discussed in the literature. A prominent avenue of research is to use the more appealing assumption of adaptive learning instead of pure adaptive expectations. As was originally shown by Marcet and ...
University of Lethbridge — Department of Economics
... 46) Along the short-run Phillips curve, if the actual unemployment rate falls below the natural unemployment rate, the A) actual inflation rate will be greater than the expected inflation rate. B) expected inflation rate will fall to zero. C) actual inflation rate will be equal to the expected infla ...
... 46) Along the short-run Phillips curve, if the actual unemployment rate falls below the natural unemployment rate, the A) actual inflation rate will be greater than the expected inflation rate. B) expected inflation rate will fall to zero. C) actual inflation rate will be equal to the expected infla ...
The New IS-LM Model: Language, Logic, and Limits
... One initial attempt at updating the IS-LM model was initiated in Sargent and Wallace (1975), who incorporated a version of the aggregate supply theory developed by Lucas (1972, 1973) in place of the Phillips curve or wage/price block. According to this rational expectations IS-LM model, systematic m ...
... One initial attempt at updating the IS-LM model was initiated in Sargent and Wallace (1975), who incorporated a version of the aggregate supply theory developed by Lucas (1972, 1973) in place of the Phillips curve or wage/price block. According to this rational expectations IS-LM model, systematic m ...
View/Open
... in volatility of nominal variables, a change in the correlation between growth rate of money and inflation, a reduction of levels of inflation and nominal interest rate, and high growth rates of real output. Furthermore, unlike data used in Basistha and Nelson (2007), Peru is an emerging country whi ...
... in volatility of nominal variables, a change in the correlation between growth rate of money and inflation, a reduction of levels of inflation and nominal interest rate, and high growth rates of real output. Furthermore, unlike data used in Basistha and Nelson (2007), Peru is an emerging country whi ...
Chapter 20 Explaining Business Cycles: Aggregate Supply and
... private sector expectations of future real income growth, thereby causing a positive shock to demand as well as supply. In statistical terms, we may thus observe a positive correlation between supply and demand shocks. However, for analytical purposes it is useful to study the two types of shocks se ...
... private sector expectations of future real income growth, thereby causing a positive shock to demand as well as supply. In statistical terms, we may thus observe a positive correlation between supply and demand shocks. However, for analytical purposes it is useful to study the two types of shocks se ...
2-04 Money and Inflation
... function yields an additional channel through which money supply affects the price level. – This general money demand equation implies that the price level depends not only on today’s money supply but also on the money supply expected in the future. ...
... function yields an additional channel through which money supply affects the price level. – This general money demand equation implies that the price level depends not only on today’s money supply but also on the money supply expected in the future. ...
Monetary Policy, Part 2
... • Other ways to achieve central bank credibility: ¾ Increase central bank independence: • People are more likely to believe that the central bank is committed to keeping inflation low if the government cannot interfere with the central bank and cannot create a political business cycle. – Evidence sh ...
... • Other ways to achieve central bank credibility: ¾ Increase central bank independence: • People are more likely to believe that the central bank is committed to keeping inflation low if the government cannot interfere with the central bank and cannot create a political business cycle. – Evidence sh ...
The Labor Market, Unemployment, and Inflation
... • Expectations are self-fulfilling. This means that wage inflation is affected by expectations of future price ...
... • Expectations are self-fulfilling. This means that wage inflation is affected by expectations of future price ...
Free Full Text ( Final Version , 817kb )
... deflator, producer price indices (PPI), core price indices (CI) and retail price index (RPI). GDP deflator, calculated by (nominal GDP/real GDP)*100, targets all goods that were produced domestically, which are different from CPI “fixed” basket of goods and services. PPI refers to the ex-factory pri ...
... deflator, producer price indices (PPI), core price indices (CI) and retail price index (RPI). GDP deflator, calculated by (nominal GDP/real GDP)*100, targets all goods that were produced domestically, which are different from CPI “fixed” basket of goods and services. PPI refers to the ex-factory pri ...
The Science of Monetary Policy
... commitment to a policy rule or by introducing some kind of institutional arrangement that achieves roughly the same end. We address the issue by examining optimal policy for both cases: with and without commitment. Along with expositing traditional results, we also exposit some new results regarding ...
... commitment to a policy rule or by introducing some kind of institutional arrangement that achieves roughly the same end. We address the issue by examining optimal policy for both cases: with and without commitment. Along with expositing traditional results, we also exposit some new results regarding ...
Five Years of Competitive and Stable Real Exchange ∗
... government decided to manage the flotation of the exchange rate in order to preserve the SCRER. The effects of the SCRER on economic activity, employment and external and fiscal accounts were demonstrating to be highly favorable. Thus, the government gradually started to recognize and make explicit ...
... government decided to manage the flotation of the exchange rate in order to preserve the SCRER. The effects of the SCRER on economic activity, employment and external and fiscal accounts were demonstrating to be highly favorable. Thus, the government gradually started to recognize and make explicit ...
ec4 - Caritas University
... bank lowers their bank rate making it cheaper to borrow from them. The commercial banks also lower its lending rate making it easy for businessmen to borrow money. In this case, investment, output, employment, income and demand starts ...
... bank lowers their bank rate making it cheaper to borrow from them. The commercial banks also lower its lending rate making it easy for businessmen to borrow money. In this case, investment, output, employment, income and demand starts ...
W Globalization and U.S. Inflation
... affect the demand for their products. In fact, there is abundant evidence that changes in exchange rates, and thus changes in the dollar costs faced by foreign producers, have only a modest effect on the dollar prices foreign producers charge in the United States. The debate over the degree of “pass ...
... affect the demand for their products. In fact, there is abundant evidence that changes in exchange rates, and thus changes in the dollar costs faced by foreign producers, have only a modest effect on the dollar prices foreign producers charge in the United States. The debate over the degree of “pass ...