Download or read book Understanding the Flattening Phillips Curve written by Kenneth N. Kuttner and published by . This book was released on 2008 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Policy-makers have recently noted an apparent flattening of the Phillips curve. The implications of such a change include that a positive output gap would be less inflationary, but the cost of reducing inflation, once established, would increase. This paper?s objective is to review the evidence and possible explanations for the flattening of the Phillips curve in the context of new-Keynesian economic theory. Using data for the United States and Australia, we find that the flattening is evident in the baseline ?structural? new-Keynesian Phillips curve. We consider a variety of reasons for this structural flattening, such as data problems, globalisation and alternative definitions of marginal cost, none of which is entirely satisfactory." -- Abstract.
Download or read book Flattening of the Phillips Curve written by Dora M. Iakova and published by International Monetary Fund. This book was released on 2007-04 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the past decade, inflation has become less responsive to domestic demand pressures in many industrial countries. This development has been attributed, in part, to globalization forces. A small macroeconomic model, estimated on UK data using Bayesian estimation, is used to analyze the monetary policy implications of this structural change. The focus is on the implications of a globalization-related flattening of the Phillips curve for the trade-off between inflation and output gap variability and for the efficient monetary policy response rule.
Download or read book Flattening of the Phillips Curve written by Chen Kan and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores potential causes of the flattening of the Phillips curve and why they matter for monetary policy. I use a novel open economy nested-CES model to show that an increase in product market concentration (Herfindahl-Hirschman Index) and a higher degree of openness to international trade both lead to a flatter Phillips curve. Within the model, the central bank's optimal policy choices depend separately on these two factors, not just on the resulting slope of the Phillips curve. My model predicts a 30% drop in the slope of the Phillips curve since the 1990s, where the major contribution comes from increases in product market concentration rather than increases in international trade openness. Through a series of policy experiments, I quantitatively show the suboptimality of the choices made by policymakers who are misinformed either about the slope of the Phillips curve or about its causes.
Download or read book The Great Recession and the Inflation Puzzle written by Mr.Troy Matheson and published by International Monetary Fund. This book was released on 2013-05-22 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: Notwithstanding persistently-high unemployment following the Great Recession, inflation in the United States has been remarkably stable. We find that a traditional Phillips curve describes the behavior of inflation reasonably well since the 1960s. Using a non-linear Kalman filter that allows for time-varying parameters, we find that three factors have contributed to the observed stability of inflation: inflation expectations have become better anchored and to a lower level; the slope of the Phillips curve has flattened; and the importance of import-price inflation has increased.
Download or read book Inflation Expectations written by Peter J. N. Sinclair and published by Routledge. This book was released on 2009-12-16 with total page 402 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring that firms and workers expect it to be low. So expectations of inflation are a key influence on national economic welfare. This collection pulls together a galaxy of world experts (including Roy Batchelor, Richard Curtin and Staffan Linden) on inflation expectations to debate different aspects of the issues involved. The main focus of the volume is on likely inflation developments. A number of factors have led practitioners and academic observers of monetary policy to place increasing emphasis recently on inflation expectations. One is the spread of inflation targeting, invented in New Zealand over 15 years ago, but now encompassing many important economies including Brazil, Canada, Israel and Great Britain. Even more significantly, the European Central Bank, the Bank of Japan and the United States Federal Bank are the leading members of another group of monetary institutions all considering or implementing moves in the same direction. A second is the large reduction in actual inflation that has been observed in most countries over the past decade or so. These considerations underscore the critical – and largely underrecognized - importance of inflation expectations. They emphasize the importance of the issues, and the great need for a volume that offers a clear, systematic treatment of them. This book, under the steely editorship of Peter Sinclair, should prove very important for policy makers and monetary economists alike.
Download or read book Bayesian Estimation of DSGE Models written by Edward P. Herbst and published by Princeton University Press. This book was released on 2015-12-29 with total page 295 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dynamic stochastic general equilibrium (DSGE) models have become one of the workhorses of modern macroeconomics and are extensively used for academic research as well as forecasting and policy analysis at central banks. This book introduces readers to state-of-the-art computational techniques used in the Bayesian analysis of DSGE models. The book covers Markov chain Monte Carlo techniques for linearized DSGE models, novel sequential Monte Carlo methods that can be used for parameter inference, and the estimation of nonlinear DSGE models based on particle filter approximations of the likelihood function. The theoretical foundations of the algorithms are discussed in depth, and detailed empirical applications and numerical illustrations are provided. The book also gives invaluable advice on how to tailor these algorithms to specific applications and assess the accuracy and reliability of the computations. Bayesian Estimation of DSGE Models is essential reading for graduate students, academic researchers, and practitioners at policy institutions.
Download or read book The Unemployment Inflation Tradeoff written by John Rutledge and published by . This book was released on 1975 with total page 134 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Hysteresis and Business Cycles written by Ms.Valerie Cerra and published by International Monetary Fund. This book was released on 2020-05-29 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
Download or read book International Macroeconomics in the Wake of the Global Financial Crisis written by Laurent Ferrara and published by Springer. This book was released on 2018-06-13 with total page 298 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book collects selected articles addressing several currently debated issues in the field of international macroeconomics. They focus on the role of the central banks in the debate on how to come to terms with the long-term decline in productivity growth, insufficient aggregate demand, high economic uncertainty and growing inequalities following the global financial crisis. Central banks are of considerable importance in this debate since understanding the sluggishness of the recovery process as well as its implications for the natural interest rate are key to assessing output gaps and the monetary policy stance. The authors argue that a more dynamic domestic and external aggregate demand helps to raise the inflation rate, easing the constraint deriving from the zero lower bound and allowing monetary policy to depart from its current ultra-accommodative position. Beyond macroeconomic factors, the book also discusses a supportive financial environment as a precondition for the rebound of global economic activity, stressing that understanding capital flows is a prerequisite for economic-policy decisions.
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 The Flattening of the Phillips Curve written by Punnoose Jacob 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 The Macroeconomics of Developing Countries written by Giovanni Andrea Cornia and published by Oxford University Press. This book was released on 2020-03-26 with total page 416 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Macroeconomics of Developing Countries provides a comprehensive discussion of the exogenous factors and macroeconomic policies that affect the business cycle, long term growth, and distribution of income in developing countries. It examines countries dependent on natural resources and affected by supply rigidities in agriculture. They also feature dualistic markets, a large informal sector, rapid population growth, a vulnerable export sector, and chronic dependence on a volatile global finance. The Macroeconomics of Developing Countries uses these examples to analyse the impact of stablization and adjustment politices on growth, inequality, and poverty. Despite the launch of the Sustainable Development Goals there is little consensus on how macroeconomic policies can be consistent with these objectives. The Macroeconomics of Developing Countries demonstrates that a critical application of standard models to developing countries can generate erroneous results and induce the adoption of incorrect policy. In order to address this, it discusses the key structural differences between advanced and developing countries in order to justify the construction of alternative models.
Download or read book Monetary Policy Strategy written by Frederic S. Mishkin and published by MIT Press. This book was released on 2009-08-21 with total page 561 pages. Available in PDF, EPUB and Kindle. Book excerpt: A leading academic authority and policymaker discusses monetary policy strategy from the perspectives of both scholar and practitioner, offering theory, econometric evidence, and extensive case studies. This book by a leading authority on monetary policy offers a unique view of the subject from the perspectives of both scholar and practitioner. Frederic Mishkin is not only an academic expert in the field but also a high-level policymaker. He is especially well positioned to discuss the changes in the conduct of monetary policy in recent years, in particular the turn to inflation targeting. Monetary Policy Strategy describes his work over the last ten years, offering published papers, new introductory material, and a summing up, “Everything You Wanted to Know about Monetary Policy Strategy, But Were Afraid to Ask,” which reflects on what we have learned about monetary policy over the last thirty years. Mishkin blends theory, econometric evidence, and extensive case studies of monetary policy in advanced and emerging market and transition economies. Throughout, his focus is on these key areas: the importance of price stability and a nominal anchor; fiscal and financial preconditions for achieving price stability; central bank independence as an additional precondition; central bank accountability; the rationale for inflation targeting; the optimal inflation target; central bank transparency and communication; and the role of asset prices in monetary policy.
Download or read book A Phillips Curve with Anchored Expectations and Short Term Unemployment written by Laurence M. Ball and published by International Monetary Fund. This book was released on 2015-02-25 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the recent behavior of core inflation in the United States. We specify a simple Phillips curve based on the assumptions that inflation expectations are fully anchored at the Federal Reserve’s target, and that labor-market slack is captured by the level of shortterm unemployment. This equation explains inflation behavior since 2000, including the failure of high total unemployment since 2008 to reduce inflation greatly. The fit of our equation is especially good when we measure core inflation with the Cleveland Fed’s series on weighted median inflation. We also propose a more general Phillips curve in which core inflation depends on short-term unemployment and on expected inflation as measured by the Survey of Professional Forecasters. This specification fits U.S. inflation since 1985, including both the anchored-expectations period of the 2000s and the preceding period when expectations were determined by past levels of inflation.
Download or read book Predicting the Markets written by Edward Yardeni and published by . This book was released on 2018-02-12 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: I started my career on Wall Street in 1978. For the past 40 years on the Street, I have been thinking and writing about the economy and financial markets as both an economist and an investment strategist. While I have a solid academic background to be a Wall Street prognosticator, I learned a great deal on the job. In this book, I share my professional insights into predicting the economy and financial markets.
Download or read book The Structural Foundations of Monetary Policy written by Michael D. Bordo and published by Hoover Press. This book was released on 2018-03-01 with total page 328 pages. Available in PDF, EPUB and Kindle. Book excerpt: In The Structural Foundations of Monetary Policy, Michael D. Bordo, John H. Cochrane, and Amit Seru bring together discussions and presentations from the Hoover Institution's annual monetary policy conference. The conference participants discuss long-run monetary issues facing the world economy, with an emphasis on deep, unresolved structural questions. They explore vital issues affecting the Federal Reserve, the United States' central bank. They voice concern over the Fed's independence, governance, and ability to withstand future shocks and analyze the effects of its monetary policies and growing balance sheet in the wake of the 2008 financial crisis. The authors ask a range of questions that get to the heart of twenty-first-century monetary policy. What should the role of the Fed be? Which policies and strategies will mitigate the risks of the next crisis and at the same time spur innovation and job creation? How can new technology make the Fed's payment system safer, faster, and more efficient? What does the emergence of crypto-currencies such as Bitcoin mean for competition and stability? How can the Fed defend itself against exploitation and politicization? Finally they propose reforms to ensure that the Fed will remain independent, stable, strong, and resilient in an unpredictable world.
Download or read book Economic Policy and the Great Stagflation written by Alan S. Blinder and published by Elsevier. This book was released on 2013-09-11 with total page 244 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economic Policy and the Great Stagflation discusses the national economic policy and economics as a policy-oriented science. This book summarizes what economists do and do not know about the inflation and recession that affected the U.S. economy during the years of the Great Stagflation in the mid-1970s. The topics discussed include the basic concepts of stagflation, turbulent economic history of 1971-1976, anatomy of the great recession and inflation, and legacy of the Great Stagflation. The relation of wage-price controls, fiscal policy, and monetary policy to the Great Stagflation is also elaborated. This publication is beneficial to economists and students researching on the history of the Great Stagflation and policy errors of the 1970s.
