2 edition of Disinflation, credibility, and price inertia found in the catalog.
Disinflation, credibility, and price inertia
|Statement||by Michael Christensen.|
|Series||Memo / Økonomisk institut, Aarhus universitet, Danmark ;, 1987-5, Memo (Aarhus universitet. Økonomisk institut) ;, 1987-5.|
|LC Classifications||MLCS 89/18365 (H)|
|The Physical Object|
|Pagination||20 p. :|
|Number of Pages||20|
|LC Control Number||89177755|
“Relative Price Volatility under Sudden Stops: The Relevance of Balance-Sheet Effects” (with A. Izquierdo and R. Loo Kung) Journal of International Economics “Inflation Inertia and Credible Disinflation – The Open Economy Case,” (with O. Celassum and . Inflation inertia may be quite tenacious because of the simultaneous interaction between policy actions and inflationary expectations under imperfect credibility. See More + This result is particularly relevant for understanding some of the failed efforts to stabilize inflation in South America.
The food-price shock is already dissipating, and although there is still uncertainty, progress is being made on fiscal adjustment. Service price disinflation is happening, albeit slowly, which is usual for this sector in Brazil. The most likely scenario is a cycle starting with a cautious pp rate cut in October. central-bank credibility, and further model- ing of rational price strategies are not by themselves likely to resolve this difficulty. The financial structure of the economy from which the disinflation starts has to be taken into consideration. Whether prices respond flexibly or not, an abrupt change in regime is.
Get this from a library! Costs and Benefits of an Anti-Inflationary Policy: Questions and Issues. [Marcus H Miller; Willem H Buiter; National Bureau of Economic Research.;] -- This paper analyses how the output or unemployment cost of achieving a sustainable reduction in the rate of inflation depends on the structure of the wage-price process and how the "sacrifice ratio". First, we develop a new mobile phone price index using hedonic quality-adjusted prices for smartphones and a matched-model index for feature phones. Our index falls at an average annual rate of 17 percent during , close to the rate of decline in the price index used in the GDP Accounts.
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Inflation inertia and credible disinflation. This book deals with the genesis and dynamics of exchange rate crises in fixed or managed exchange rate systems.
price level inertia is not. Disinflation is a decrease in the rate of inflation – a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over time.
It is the opposite of lation occurs when the increase in the “consumer price level” slows down from the previous period when the prices were rising. Downloadable. This paper develops a model of inflation inertia based on optimizing forward looking staggered price setting in a small open economy. Unlike in current models of sticky prices, transitions to a lower steady state inflation rate take time even if they are fully credible, and they are associated with significant output losses.
There is a welfare trade-off between these output. Javier G. Gómez-Pineda, "Wage Indexation, Inflation Inertia, and the Cost of Disinflation," Revista ESPE - Ensayos sobre Política Económica, Banco de la.
Optimal state dependent rules, credibility and inflation inertia. Discussion PaperEPGE, Funda-c* ao Getulio Vargas Credible disinflation with staggered price setting Jan Credible Disinflation with Staggered Price-Setting Although most macroeconomists agree that disinflations reduce output, there is no consensus about why.
New classical economists argue that credibility problems are central-that disinflation would be cost- less if the public believed policy announce.
This paper examines whether price controls may enhance the credibility of a disinflation program, using a framework in which agents behave strategically. The analysis indicates that a partial price freeze is not fully credible, and may result in inflation inertia.
The latest in a series of papers published by the International Monetary Fund on economies in transition examines the experience of disinflation in Central and Eastern Europe, the Baltics, Russia, and other countries of the former Soviet Union between and The paper reviews the economic policies underlying the dramatic drop in inflation during those years as well as other variables.
The limits of the argument have been pointed out by Ball (a), in particular, who has shown that this overhang of past nominal wage decisions leads to price inertia, and not necessarily inflation inertia.
For inflation inertia to be present, what is needed is the interaction between lack of full credibility and the nominal wage-setting. Abstract. The policy announcements of regime changes which have characterized a number of western economies, e.g the United States (October ) and United Kingdom (May ) have given rise to an enormous theoretical dispute concerning the credibility problems facing a government, e.g.
Barro and Gordon () and Backus and Driffill ().Cited by: 5. We described the course of the deliberate disinflation in our model without utilizing a policy rule. Instead, we focused on the interplay between inflation, output, interest rates, and credibility.
Ultimately, one would like to add the “missing policy equation” to better understand the incredible Volcker disinflation. Cited by: The following chapter is prepared for publication as Chapter 3 in Inflation and Disinflation in Turkey, edited by Aykut Kibritçioğlu, Libby Rittenberg and Faruk Selçuk.
The proper citation for this work would be: Kibritçioğlu, A. (): “Causes of Inflation in Turkey: A Literature Survey with Special Reference to Theories of Inflation”.Cited by: relative to a base year is the consumer price index (CPI), and the percentage change in the CPI over a certain pe-riod is consumer price inflation, the most widely used measure of inflation.
(For example, if the base year CPI is and the current CPI isinflation is 10 percent over the period.)File Size: 80KB. Earlier versions of this paper were presented at the Claremont Workshop on “The Political Economy of Global Monetary Stabilization,” Octoberand at the meetings of the European Community Studies Association in Washington, D.C., Cited by: 6.
Page 2 of 7 • “Policy Initiatives in the Global Recession: What Did Forecasters Expect?” with Stefano Eusepi and Christian Grisse. Current Issues in Economics and Fina February • “Aggregation and the PPP Puzzle in a Sticky-Price Model,” with Fernanda Nechio. Monetary policy is the policy adopted by the monetary authority of a country that controls either the interest rate payable on very short-term borrowing or the money supply, often targeting inflation or the interest rate to ensure price stability and general trust in the currency.
Unlike fiscal policy which relies on government to spend its way out of recessions, monetary policy aims to. From Our Blog. National Epidemics, Then and Now.
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Book Description: The global financial crisis triggered severe shocks for developing countries, whose embrace of greater commercial and financial openness has increased their exposure to external shocks, both real and financial.
(such as the degree of capital mobility and the existence of wage and price inertia); credibility problems; and. price for disinflation. In there was a redistribution from firms to workers implicit in the rise in real wages.
But firms were able to react to defend themselves and, in the process, made the price freeze an increasingly costly option.
The second lesson concerns indexation. Indexation in the presence of supplyCited by: 3. inertia, to a worsening of both inflation expectations and actual future inflation (Brazil's target of 4% was breached with an inflation of %, and month forward inflation expectations were % at the end of Figure 1 INFLATION BEFORE AND AFTER ADOPTION OF INFLATION TARGETING (IT) 13 Emerging Market Economies 0) (0 8 Developed Cited by:.
Inflation and Disinflation in Turkey For more information on the emergence of the literature on new political macroeconomy, see Alesina et al. () and Drazen (). Traditionally, macroeconom(etr)ic models posit that monetary shocks have an effect on the economy only through a .Because inflation continues to exhibit some inertia, improved near-term forecasts translate into more-accurate longer-term projections as well.
For forecasting horizons beyond a quarter or two, detailed analyses of individual price components become less useful, and thus the staff's emphasis shifts to inflation's fundamental determinants.Email your librarian or administrator to recommend adding this book to your organisation's collection.
Central Banks at a Crossroads “Opening Remarks”, in Achieving Price Stability, A Symposium sponsored by the Federal Reserve Bank of and Siklos, P.L. (), “Central Bank Credibility, Reputation and Inflation Targeting in Cited by: