Download or read book European Inflation Dynamics written by Jordi Galí and published by . This book was released on 2001 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: We provide evidence on the fit of the New Phillips Curve (NPQ for the Euro area over the period 1970-1998, and use it as a tool to compare the characteristics of European inflation dynamics with those observed in the U.S. We also analyze the factors underlying inflation inertia by examining the cyclical behavior of marginal costs, as well as that of its two main components, namely, labor productivity and real wages. Some of the findings can be summarized as follows: (a) the NPC fits Euro area data very well, possibly better than U.S. data, (b) the degree of price stickiness implied by the estimates is substantial, but in line with survey evidence and U.S. estimates, (c) inflation dynamics in the Euro area appear to have a stronger forward- looking component (i.e., less inertia) than in the U.S., (d) labor market frictions, as manifested in the behavior of the wage markup, appear to have played a key role in shaping the behavior of marginal costs and, consequently, inflation in Europe.

Download or read book Understanding Euro Area Inflation Dynamics Why So Low for So Long written by Mr.Yasser Abdih and published by International Monetary Fund. This book was released on 2018-08-22 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: Despite closing output gaps and tightening labor markets, inflation has remained low in the euro area. Based on an augmented Phillips Curve framework, we find that this phenomenon—sometimes attributed to low global inflation—has been primarily caused by a remarkable persistence of inflation, keeping it low despite the reduction in slack. This feature is shown to be specific to the euro area (in comparison with the United States). Monetary policy needs to stay accommodative to help guide inflation back to target.

Download or read book Inflation Dynamics Reconsidered Inflation Targeting Europe vs United States written by Marc Kern and published by GRIN Verlag. This book was released on 2016-03-08 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bachelor Thesis from the year 2015 in the subject Economics - Macro-economics, general, grade: 1,3, University of Frankfurt (Main) (Departement of Money and Macroeconomics), language: English, abstract: This paper investigates the inflation dynamics of Germany, Italy, Finland, the whole Europe Area and the United States, based on a General-Method of Moments (GMM) estimation. The New-Keynesian Model and the Real-Business-Cycle Model are essential for the estimation.

Download or read book Heterogeneous Expectations Learning and European Inflation Dynamics written by Anke Weber and published by . This book was released on 2007 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper is the first attempt to investigate the performance of different learning rules in fitting survey data of household and expert inflation expectations in five core European economies (France, Germany, Italy, Netherlands and Spain). Overall it is found that constant gain learning performs well in out-of-sample forecasting. It is also shown that households in high inflation countries are using higher best fitting constant gain parameters than those in low inflation countries. They are hence able to pick up structural changes faster. Professional forecasters update their information sets more frequently than households. Furthermore, household expectations in the Euro Area have not converged to the inflation goal of the ECB, which is to keep inflation belowto but close to 2% in the medium run. This contrasts the findings for professional experts, which seem to be more inclined to incorporate the implications of monetary union for the convergence in inflation rates into their expectations.

Download or read book The Role of Expectations in Euro Area Inflation Dynamics written by Maritta Paloviita and published by . This book was released on 2005 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt: Tiivistelmä.

Download or read book Inflation Dynamics in Bulgaria The Role of Policies written by Anh D. M. Nguyen and published by International Monetary Fund. This book was released on 2023-09-29 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyses inflation dynamics in Bulgaria using different complementary econometrics technics. We find that common factors play a large role in the EU’s inflation variation but impact individual countries differently due to country-specific factors. Greater weight of energy and food in Bulgaria’s CPI basket amplifies the impact of shocks on headline inflation. Furthermore, second-round effects in Bulgaria are likely pronounced, associated with a higher inflation persistence compared to the EU countries. Recent ECB monetary tightening has been insufficient for Bulgaria and its transmission is weak. Fiscal policy supported the recovery from the COVID crisis but added to inflation.

Download or read book Measuring EU Inflation written by John Astin and published by Springer Nature. This book was released on 2021-06-25 with total page 271 pages. Available in PDF, EPUB and Kindle. Book excerpt: The HICP is a consumer price index which was designed to provide measures of inflation in EU member states calculated using similar methods and thus comparable one with another. The HICP now tracks the inflation rates covering over 500 million Europeans, including the UK, and is also produced by other countries such as the USA. John Astin was the EU statistician in charge of the initial development of this important index and he has the best knowledge of how it was developed in the 1990s. This book is a history of the main development period of the HICP, up to the year 2002 when Astin left the European Commission. It will be of interest to a wide range of readers, not only in the UK but globally. Types of readers are likely to include: economists, economic statisticians, national statistics offices, universities, libraries, government finance/economic ministries, international organizations such as UN, ILO, OECD, EU, Eurostat, ECB, and central banks, as well as individuals who are interested in the construction of consumer price indices. This book begins by explaining the background to the HICP project, both from an economic and a political viewpoint, and describes the specific needs for harmonized price indices resulting from the Maastricht treaty of 1992. It analyses the process of establishing the necessary procedures for taking this urgent work forward and gives details of the technical issues involved, and the critical issue of drafting legal acts which would be necessary to ensure full compliance with the new rules. It includes analysis of products, price collection issues, quality adjustment, timing, and a host of other issues, and discusses the arguments which had to be resolved, as well as some human aspects of the process too. It also looks at the funding aspects, the recruitment of specialist consultants, the legal processes and the organization of meetings, both in Luxembourg and in other countries.

Download or read book Inflation Dynamics in the Western Balkans written by Gohar Minasyan and published by International Monetary Fund. This book was released on 2023-03-03 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: After trailing Euro Area inflation closely in the recent past, inflation in the Western Balkans has accelerated faster since early 2022 on the back of the shocks to global commodity prices, strong recovery from the pandemic, and lingering supply bottlenecks. This paper employs two complementary empirical approaches of an augmented Phillips curve and structural VAR, adapting them to the data availability and country specificities of the Western Balkans, to analyze the inflation dynamics in the region. It finds that international food prices affect not only headline but also core inflation as well as inflation expectations. Further, inflation in the Western Balkans is not just determined by foreign shocks, and domestic factors, aggregate demand shocks in particular, have a significant impact on inflation. These findings imply a possible role for policies to temporarily limit an immediate and complete pass-through of international to domestic food prices while also stressing the importance of an appropriate domestic macroeconomic policy mix to keep inflation expectations anchored and safeguard credibility in the face of high inflation persistence.

Download or read book The 2020 2022 Inflation Surge Across Europe A Phillips Curve Based Dissection written by Chikako Baba and published by International Monetary Fund. This book was released on 2023-02-10 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2021-22, inflation in Europe soared to multidecade highs, consistently exceeding policymakers’ forecasts and surprising with its wide cross-country dispersion. This paper analyzes the key drivers of the inflation surge in Europe and its variation across countries. The analysis highlights significant differences in Phillips curve parameters across Europe’s economies. Inflation is more sensitive to domestic slack and external price pressures in emerging European economies compared to their advanced counterparts, which contributed to a greater passthrough of global commodity price shocks into domestic prices, and, consequently, to larger increases in inflation rates. Across Europe, inflation also appears to have become increasingly backward looking and more sensitive to commodity price shocks since the onset of the COVID-19 pandemic. This finding helps explain why conventional (Phillips curve) inflation models consistently underpredicted the 2021-2022 inflation surge, although it remains too early to conclude there has been a structural break in the inflation process.

Download or read book European Inflation Expectations Dynamics written by Jörg Döpke and published by . This book was released on 2005 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Exploring Trend InFLation Dynamics in Euro Area Countries written by Mónica Correa-López and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Here Comes the Change The Role of Global and Domestic Factors in Post Pandemic Inflation in Europe written by Mahir Binici and published by International Monetary Fund. This book was released on 2022-12-09 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: Global inflation has surged to 7.5 percent in August 2022, from an average of 2.1 percent in the decade preceding the COVID-19 pandemic, threatening to become an entrenched phenomenon. This paper disentangles the confluence of contributing factors to the post-pandemic rise in consumer price inflation, using monthly data and a battery of econometric methodologies covering a panel of 30 European countries over the period 2002-2022. We find that while global factors continue to shape inflation dynamics throughout Europe, country-specific factors, including monetary and fiscal policy responses to the crisis, have also gained greater prominence in determining consumer price inflation during the pandemic period. Coupled with increasing persistence in inflation, these structural shifts call for significant and an extended period of monetary tightening and fiscal realignment.

Download or read book Brookings Papers on Economic Activity Fall 2019 written by Janice Eberly and published by Brookings Institution Press. This book was released on 2020-08-25 with total page 541 pages. Available in PDF, EPUB and Kindle. Book excerpt: Brookings Papers on Economic Activity (BPEA) provides academic and business economists, government officials, and members of the financial and business communities with timely research on current economic issues. Contents: All Medicaid Expansions Are Not Created Equal: The Geography and Targeting of the Affordable Care Act Craig Garthwaite, John Graves, Tal Gross, Zeynal Karaca, Victoria Marone, and Matthew J. Notowidigdo Policies and Payoffs to Addressing America’s College Graduation Deficit Christopher Avery, Jessica Howell, Matea Pender, and Bruce Sacerdote The Optimal Inflation Target and the Natural Rate of Interest Philippe Andrade, Jordi Galí, Hervé Le Bihan, and Julien Matheron Inflation Dynamics: Dead, Dormant, or Determined Abroad? Kristen J. Forbes Macri’s Macro: The Elusive Road to Stability and Growth Federico Sturzenegger Progressive Wealth Taxation Emmanuel Saez and Gabriel Zucman

Download or read book Inflation Dynamics and the Great Recession written by Laurence M. Ball and published by International Monetary Fund. This book was released on 2011-06-01 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines inflation dynamics in the United States since 1960, with a particular focus on the Great Recession. A puzzle emerges when Phillips curves estimated over 1960-2007 are ussed to predice inflation over 2008-2010: inflation should have fallen by more than it did. We resolve this puzzle with two modifications of the Phillips curve, both suggested by theories of costly price adjustment: we measure core inflation with the median CPI inflation rate, and we allow the slope of the Phillips curve to change with the level and vairance of inflation. We then examine the hypothesis of anchored inflation expectations. We find that expectations have been fully "shock-anchored" since the 1980s, while "level anchoring" has been gradual and partial, but significant. It is not clear whether expectations are sufficiently anchored to prevent deflation over the next few years. Finally, we show that the Great Recession provides fresh evidence against the New Keynesian Phillips curve with rational expectations.

Download or read book European Monetary Union and Exchange Rate Dynamics written by Paul J.J. Welfens and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 161 pages. Available in PDF, EPUB and Kindle. Book excerpt: The creation of the European Central Bank and the Euro have brought new challenges to EU integration and economic policy. This book looks into issues of monetary and factor market policies. The analysis presents new theoretical and empirical research on the current decline of the Euro. Issues regarding exchange rate policies and international economic relations are also addressed.

Download or read book Republic of Lithuania Selected Issues written by Leo Bonato and published by INTERNATIONAL MONETARY FUND. This book was released on 2005-03-31 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Selected Issues paper looks at short-term inflation dynamics in the new member states (NMS) of the European Union, focusing on the role of monetary policy regimes. It models the determinants of inflation in the NMS and assesses how different theoretical frameworks best fit the data. The paper investigates the macroeconomic performance of currency boards within the group of NMS, evaluates their role in reducing inflation, and identifies some of their distinctive characteristics. The paper also examines the current account sustainability for Lithuania.

Download or read book Zero Lower Bound and Monetary Policy in the Euro Area written by Lars Protze and published by Diplomica Verlag. This book was released on 2008-08 with total page 185 pages. Available in PDF, EPUB and Kindle. Book excerpt: Central banks around the world try to influence economic activity by altering nominal interest rates which will have an effect on the real rate. However, this is only possible as long as interest rates are above zero. The case of Japan showed that monetary policy was helpless as nominal rates approached zero. This Book starts with an overview of monetary policy with the restriction that interest rates can not fall below zero. Then optimal monetary policy in a low inflation environment is treated. This is done by using a New Keynesian model with sticky prices. Therefore the model and the necessary optimality conditions will be derived (this will be done extensively in the appendix). After deriving the optimality conditions it will be shown how optimal monetary policy will be conducted. To evaluate the outcome of monetary policy a welfare function will be derived. It will be shown how the welfare function to evaluate the outcome of monetary policy is derived from the utility function of the household. As a result it will be shown that a price level target is welfare maximizing although most central banks nowadays use an inflation target instead. Reasons for an inflation target will be shown in the discussion of the model. The second part of the book describes the inflation dynamics in the euro area to see what monetary authority shall do to prevent the economy from falling into the vicious circle of deflation. Two wage contracting models that describe inflation dynamics in the euro area reasonably well will be explained, the Fuhrer-Moore und the Taylor contracting. After showing the optimal policy it will be discussed how severe the zero bound in the euro area is and what policy alternatives are left when monetary policy is restricted. Finally the results obtained will be discussed to see the pitfalls of price level targeting. The large appendix provides the complete derivation of the model and the optimality conditions.