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 ...
Inflation Dynamics in Sri Lanka: An Empirical Analysis
... makers in Sri Lanka. Table 1 provides a comparison of inflation rates in Sri Lanka with other economies and illustrates that except for Sri Lanka and emerging market and developing economies, all other regions maintain their inflation at low levels. ...
... makers in Sri Lanka. Table 1 provides a comparison of inflation rates in Sri Lanka with other economies and illustrates that except for Sri Lanka and emerging market and developing economies, all other regions maintain their inflation at low levels. ...
BANK OF JAMAICA Quarterly Monetary Policy Report
... The above chart presents the output gap, the gap between actual output and potential, and the NAIRU gap, the gap between Unemployment and the Non-Accelerating Inflation Rate of Unemployment (NAIRU). When output is below potential (negative output gap) inflationary pressures are negative due to econo ...
... The above chart presents the output gap, the gap between actual output and potential, and the NAIRU gap, the gap between Unemployment and the Non-Accelerating Inflation Rate of Unemployment (NAIRU). When output is below potential (negative output gap) inflationary pressures are negative due to econo ...
INFLATION IN VIETNAM
... until present. It should be noted that Vietnam had centralized and closed economy with rationing system after getting its independence in 1975. Despite the government’s strict control of commodity prices and wages, the government failed to ensure the stability of prices. One illegally parallel marke ...
... until present. It should be noted that Vietnam had centralized and closed economy with rationing system after getting its independence in 1975. Despite the government’s strict control of commodity prices and wages, the government failed to ensure the stability of prices. One illegally parallel marke ...
The Science of Monetary Policy
... a stripped-down baseline model in order to characterize a number of broad principles that underlie optimal policy management. We then consider the implications of adding various real world complications. Finally, we assess how the predictions from theory square with policy-making in practice. Throug ...
... a stripped-down baseline model in order to characterize a number of broad principles that underlie optimal policy management. We then consider the implications of adding various real world complications. Finally, we assess how the predictions from theory square with policy-making in practice. Throug ...
Inflating Away the Public Debt? - Centre for Economic Policy Research
... Reserve, which in 2012 held significant long-term debt, would suffer a significant loss with higher inflation. Second and related, over only a few years, market participants put a very low probability on U.S. inflation being significantly high. In the near horizons, there is much debt but little ext ...
... Reserve, which in 2012 held significant long-term debt, would suffer a significant loss with higher inflation. Second and related, over only a few years, market participants put a very low probability on U.S. inflation being significantly high. In the near horizons, there is much debt but little ext ...
Chapter 11 - Pearson Canada
... Real Business Cycle Theory and the Business Cycle Facts Although the RBC theory—which combines the classical, or market-clearing, version of the IS–LM–FE model with the assumption that productivity shocks are the dominant form of economic disturbance—is relatively simple, it is consistent with many ...
... Real Business Cycle Theory and the Business Cycle Facts Although the RBC theory—which combines the classical, or market-clearing, version of the IS–LM–FE model with the assumption that productivity shocks are the dominant form of economic disturbance—is relatively simple, it is consistent with many ...
Core inflation: a critical guide
... interpret. The ‘noise’ might be a reflection of movements in relative prices, or it may reflect one-off price level effects that will affect the annual inflation rate for a year. A key task for policymakers, as with all economic variables they monitor, is to read through the volatility or ‘noise’ in ...
... interpret. The ‘noise’ might be a reflection of movements in relative prices, or it may reflect one-off price level effects that will affect the annual inflation rate for a year. A key task for policymakers, as with all economic variables they monitor, is to read through the volatility or ‘noise’ in ...
Aggregate Demand and Aggregate Supply
... A fall in the price level from P1 to P2 increases the quantity of goods and services demanded from Y1 to Y2. There are three reasons for this negative relationship. As the price level falls, real wealth rises, interest rates fall, and the exchange rate depreciates. These effects stimulate spending o ...
... A fall in the price level from P1 to P2 increases the quantity of goods and services demanded from Y1 to Y2. There are three reasons for this negative relationship. As the price level falls, real wealth rises, interest rates fall, and the exchange rate depreciates. These effects stimulate spending o ...
Sample Chapter 28
... economic developments that would permit the rapid growth to continue without increased inflation. If he was right, an aggressive increase in interest rates was not only unnecessary but could damage the economy. What did Greenspan see? Did the Fed raise interest rates in 1996? What happened to output ...
... economic developments that would permit the rapid growth to continue without increased inflation. If he was right, an aggressive increase in interest rates was not only unnecessary but could damage the economy. What did Greenspan see? Did the Fed raise interest rates in 1996? What happened to output ...
2012 IOptimal Policy and the Sectoral Composition of Output
... The private sector equilibrium for given interest and tax rates is described by equations (6), (8), (9), (10) and (11). Government chooses monetary and tax policy to maximise welfare subject to these constraints. Net revenue from payroll taxes and subsidies is spent on or financed by lump sum transf ...
... The private sector equilibrium for given interest and tax rates is described by equations (6), (8), (9), (10) and (11). Government chooses monetary and tax policy to maximise welfare subject to these constraints. Net revenue from payroll taxes and subsidies is spent on or financed by lump sum transf ...
Bank of England Inflation Report May 2008
... and in April the MPC cut Bank Rate by 0.25 percentage points. Under the assumption that Bank Rate moves in line with market yields, the Committee’s central projection is for output growth to slow further over the next year and then recover. But there is a risk that the slowdown may be more prolonged ...
... and in April the MPC cut Bank Rate by 0.25 percentage points. Under the assumption that Bank Rate moves in line with market yields, the Committee’s central projection is for output growth to slow further over the next year and then recover. But there is a risk that the slowdown may be more prolonged ...
paper - University of Oxford, Department of Economics
... would be ever to decide whether inflation was due to excess demand or to cost push factors, and they ended up concluding that the kind of aggregate data they had did not allow them to distinguish between the various possible causes. They did contemplate (p191) the possibility of a 'vast experiment' ...
... would be ever to decide whether inflation was due to excess demand or to cost push factors, and they ended up concluding that the kind of aggregate data they had did not allow them to distinguish between the various possible causes. They did contemplate (p191) the possibility of a 'vast experiment' ...
The impact of land supply on prices: A sub
... weak, but statistically significant, relationship with house prices and those suburbs with high levels of land supply tended to exhibit price growth at a lower rate that suburbs with no new land supply. However, there was no relationship across sub-markets due to the considerable variation within th ...
... weak, but statistically significant, relationship with house prices and those suburbs with high levels of land supply tended to exhibit price growth at a lower rate that suburbs with no new land supply. However, there was no relationship across sub-markets due to the considerable variation within th ...
NBE WO~G PAPER SERIES THE TIME-VARYING NAIRU AND ITS
... at any given time there exists a unique NAIRU, then the Phillips curve tradeoff at that unemployment ...
... at any given time there exists a unique NAIRU, then the Phillips curve tradeoff at that unemployment ...
Swedish Quantitative Easing
... 2. Theoretical framework ........................................................................................................... 5 2.1 The Mundell-Fleming (IS-LM-FE) model ....................................................................... 5 2.1.1 Overview of the model....................... ...
... 2. Theoretical framework ........................................................................................................... 5 2.1 The Mundell-Fleming (IS-LM-FE) model ....................................................................... 5 2.1.1 Overview of the model....................... ...
Monetary Policy Statement June 1997 Contents
... Until now, the Bank’s projections have included simple ‘straight line’ assumptions regarding the future path of interest rates and the exchange rate. Using these and many other assumptions, projections were developed for economic activity and inflation. In other words, the inflation outlook was cond ...
... Until now, the Bank’s projections have included simple ‘straight line’ assumptions regarding the future path of interest rates and the exchange rate. Using these and many other assumptions, projections were developed for economic activity and inflation. In other words, the inflation outlook was cond ...
Document
... capital, and land to produce Y = 800 bushels of corn. V is constant. In 2008, MS = $2000, P = $5/bushel. For 2009, the Fed increases MS by 5%, to $2100. a. Compute the 2009 values of nominal GDP and P. Compute the inflation rate for 2008–2009. ...
... capital, and land to produce Y = 800 bushels of corn. V is constant. In 2008, MS = $2000, P = $5/bushel. For 2009, the Fed increases MS by 5%, to $2100. a. Compute the 2009 values of nominal GDP and P. Compute the inflation rate for 2008–2009. ...
Download paper (PDF)
... various innovations in firms’ and consumers’ behavior, perhaps induced by technological progress or financial innovations, might have allowed consumers to better cushion themselves from the impact of interest-rate fluctuations.4 This is however not the only possible interpretation. In fact, the resp ...
... various innovations in firms’ and consumers’ behavior, perhaps induced by technological progress or financial innovations, might have allowed consumers to better cushion themselves from the impact of interest-rate fluctuations.4 This is however not the only possible interpretation. In fact, the resp ...
Monetary Policy in Japan: Problems and Solutions
... Governor Hayami, misjudged the economic conditions, maybe because they were too eager to go back to the “normal” situation where the interest rate is positive. The interest rate hike in August 2000 was a clear mistake of this kind. Second, the Governor and fellow Board members took independence lite ...
... Governor Hayami, misjudged the economic conditions, maybe because they were too eager to go back to the “normal” situation where the interest rate is positive. The interest rate hike in August 2000 was a clear mistake of this kind. Second, the Governor and fellow Board members took independence lite ...
Endogenous Wage Indexation and Aggregate
... indexation literature. Using an aggregate loss function criterion, they find that the optimal aggregate indexation increases when supply-side shocks become more important in explaining output fluctuations (relative to nominal or demand-side shocks). More recent papers find similar conclusions.6 In c ...
... indexation literature. Using an aggregate loss function criterion, they find that the optimal aggregate indexation increases when supply-side shocks become more important in explaining output fluctuations (relative to nominal or demand-side shocks). More recent papers find similar conclusions.6 In c ...
