Download or read book Inflation Persistence and Relative Contracting written by John Christopher Driscoll and published by . This book was released on 2003 with total page 10 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Inflation Persistence and Relative Contracting written by John C. Driscoll and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Macroeconomists have for some time been aware that the New Keynesian Phillips curve, though highly popular in the literature, cannot explain the persistence observed in actual inflation. We argue that one of the more prominent alternative formulations, the Fuhrer and Moore (1995) relative contracting model, is highly problematic. Fuhrer and Moore's 1995 formulation generates inflation persistence, but this is a consequence of their assuming that workers care about the past real wages of other workers. Making the more reasonable assumption that workers care about the current real wages of other workers, one obtains the standard formulation with no inflation persistence.
Download or read book The Inflation Persistence of Staggered Contracts written by Luca Guerrieri and published by . This book was released on 2002 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book A Note on Inflation Persistence written by Steinar Holden and published by . This book was released on 2001 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: Macroeconomists have for some time been aware that the New Keynesian Phillips curve, though highly popular in the literature, cannot explain the persistence observed in actual inflation. We argue that two of the more prominent alternative formulations, the Fuhrer and Moore (1995) relative contracting model and the Blanchard and Katz (1999) reservation wage conjecture, are highly problematic. Fuhrer and Moore (1995)'s formulation generates inflation persistence, but this is a consequence of their assuming that workers care about the past real wages of other workers. Making the more reasonable assumption that workers care about the current real wages of other workers, one obtains the standard formulation with no inflation persistence. The Blanchard and Katz conjecture turns out to imply that inflation depends negatively on itself lagged, i.e. the opposite of the empirical regularity
Download or read book Contracting Models of the Phillips Curve written by Pierre-Richard Agénor and published by World Bank Publications. This book was released on 2003 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides empirical estimates of contracting models of the Phillips curve for four middle-income developing economies-Chile, the Republic of Korea, the Philippines, and Turkey. Following an analytical review, models with both one lead and one lag, and two lags and three leads, are then estimated using Generalized Method of Moments (GMM) techniques. The results indicate that for both Chile and Turkey past and future inflation are of about the same magnitude in affecting current inflation. In Korea past inflation has a larger impact on inflation, whereas in the Philippines it is future inflation that plays a larger role. Homogeneity restrictions are satisfied for Korea and Turkey, but not for Chile and the Philippines.
Download or read book Coordination Fair Treatment and Inflation Persistence written by John C. Driscoll and published by . This book was released on 2002 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: Most wage-contracting models with rational expectations fail to replicate the persistence in inflation observed in the data. We argue that coordination problems and multiple equilibria are the keys to explaining inflation persistence. We develop a wage-contracting model in which workers are concerned about being treated fairly. This model generates a continuum of equilibria (consistent with a range for the rate of unemployment), where workers want to match the wage set by other workers. If workers' expectations are based on the past behavior of wage growth, these beliefs will be self-fulfilling and thus rational. Based on quarterly U.S. data over the period 1955-2000, we find evidence that inflation is more persistent between unemployment rates of 4.7 and 6.5 percent, than outside these bounds, as predicted by our model.
Download or read book Coordination Fair Treatment and Inflation Persistence written by John Christopher Driscoll and published by . This book was released on 2003 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Expectations Anchoring and Inflation Persistence written by Mr.Rudolfs Bems and published by International Monetary Fund. This book was released on 2018-12-11 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: Understanding the sources of inflation persistence is crucial for monetary policy. This paper provides an empirical assessment of the influence of inflation expectations' anchoring on the persistence of inflation. We construct a novel index of inflation expectations' anchoring using survey-based inflation forecasts for 45 economies starting in 1989. We then study the response of consumer prices to terms-of-trade shocks for countries with flexible exchange rates. We find that these shocks have a significant and persistent effect on consumer price inflation when expectations are poorly anchored. By contrast, inflation reacts by less and returns quickly to its pre-shock level when expectations are strongly anchored.
Download or read book Monetary Policy and Macroeconomic Stabilization written by Ole Roste and published by Routledge. This book was released on 2017-09-08 with total page 214 pages. Available in PDF, EPUB and Kindle. Book excerpt: As a fundamental review and critique of activist economic policies, this book is a unique contribution to classical political economy. "Monetary Policy and Macroeconomic Stabilization" is about macroeconomic stabilization policy, with emphasis on the value of a distinct national monetary policy to growth. Ole Bjorn Roste's argument is for public officials to restrain themselves in the pursuit of policy. As the author notes: when you know less, you should do less.The history of modern macroeconomics started in 1936 with the publication of Keynes' "General Theory of Employment, Interest, and Money". The problems of the Great depression of the 1930s paved the way for a change of focus, from the long run to economic fluctuations in the short run, and from nominal to real variables, such as unemployment and aggregate output.Keynes offered clear policy implications in tune with the times. Because economic adjustment was slow, waiting for the economy to recover by itself was irresponsible. Particularly fiscal policy was essential to return to high employment. Monetary policy could affect aggregate demand through Interest rates, but was less important. Roste discusses the role of monetary policy, starting out with the implications of the theory of optimum currency areas (OCAs). This is followed by estimates of the output loss associated with disinflation policy (the sacrifice ratio) for six OECD economies. Further, Roste models the dynamic adjustment to negative, local labor-market shocks, with particular relevance to Scandinavia, in a final section.The idea that governments should pursue stabilizing fiscal or monetary policies with regard to real variables is often taken for granted by the public, if not by economists. Among the reasons for skepticism, is the presence of differing views on how economies really work, that the state of a given economy becomes known only after a time lag, and that economic agents react to policy and expectations of policy. For these reasons, the effects of policy are generally uncertain. This book explains why the role of history is critical to the study of macroeconomics.p>
Download or read book Relative Price Distortions and Inflation Persistence written by Tatiana Damjanovic and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many sticky-price models suggest that relative price distortion is one of the major costs of inflation. We show that this resource misallocation is costly even at quite low rates of inflation. This is because inflation strongly affects price dispersion which in turn has an impact on the economy qualitatively similar to, and of the order of magnitude of, a negative shift in productivity. Similarly, the utility cost of price dispersion is large. We incorporate price dispersion in a linearized model. This radically affects how shocks are transmitted through the economy. Notably, a contractionary nominal shock has a persistent, negative hump-shaped impact on inflation, but may have a positive hump-shaped impact on output. Observed persistence in the policy rate is not due to the policy rule per se.
Download or read book Optimal Monetary Policy under Uncertainty Second Edition written by Richard T. Froyen and published by Edward Elgar Publishing. This book was released on 2019 with total page 432 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a thorough survey of the model-based literature on optimal monetary in a stochastic setting. The survey begins with the literature of the 1970s which focused on the information problem in policy design and extends to the New Keynesian approach of the 1990s which centered on evaluating alternative targeting strategies. New to the second edition is consideration of research since the world financial crisis on the role of financial markets and institutions in the conduct of monetary policy.
Download or read book Inflation Targets Credibility and Persistence in a Simple Sticky price Framework written by Jeremy Bay Rudd and published by . This book was released on 2003 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Staggered Price Contracts and Inflation Persistence written by Karl Whelan and published by . This book was released on 2004 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The American Economic Review written by and published by . This book was released on 2003 with total page 880 pages. Available in PDF, EPUB and Kindle. Book excerpt: Includes papers and proceedings of the annual meeting of the American Economic Association. Covers all areas of economic research.
Download or read book An Inflation Goal with Multiple Reference Measures written by William C. Whitesell and published by . This book was released on 2005 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Monetary Policy Rules written by John B. Taylor and published by University of Chicago Press. This book was released on 2007-12-01 with total page 460 pages. Available in PDF, EPUB and Kindle. Book excerpt: This timely volume presents the latest thinking on the monetary policy rules and seeks to determine just what types of rules and policy guidelines function best. A unique cooperative research effort that allowed contributors to evaluate different policy rules using their own specific approaches, this collection presents their striking findings on the potential response of interest rates to an array of variables, including alterations in the rates of inflation, unemployment, and exchange. Monetary Policy Rules illustrates that simple policy rules are more robust and more efficient than complex rules with multiple variables. A state-of-the-art appraisal of the fundamental issues facing the Federal Reserve Board and other central banks, Monetary Policy Rules is essential reading for economic analysts and policymakers alike.
Download or read book Defence Inflation written by Keith Hartley and published by Routledge. This book was released on 2018-10-18 with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt: Defence inflation is a recurring factor in determining defence spending. It is widely reported in official government publications and in the trade press, but remains relatively neglected by defence and peace economists. In this book, international contributors from Finland, Norway, Sweden, the UK and the USA distinguish between defence inflation and cost escalation, and identify the causes of both. They use specific case studies to address a wide variety of theoretical and empirical issues and key questions, including the following: Does defence inflation affect all countries? What are its effects? Why does it occur? How (if at all) can defence inflation be controlled? While most industry and trade press devote considerable ink and space to the discussion of defence inflation, cost escalation, and their consequential impact on the purchasing dollars of the armed forces, economists have been relatively silent. This book aims to rectify this oversight through a multinational survey and analysis of the topic, while also identifying the opportunities for further theoretical and empirical research in the field. This book was originally published as a special issue of the journal Defence and Peace Economics.
