Expectations' Anchoring and Inflation Persistence PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Expectations' Anchoring and Inflation Persistence PDF full book. Access full book title Expectations' Anchoring and Inflation Persistence by Mr.Rudolfs Bems. Download full books in PDF and EPUB format.
Author: Mr.Rudolfs Bems
Publisher: International Monetary Fund
ISBN: 148439223X
Category : Business & Economics
Languages : en
Pages : 31
Get Book Here
Book Description
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.
Author: Mr.Rudolfs Bems
Publisher: International Monetary Fund
ISBN: 148439223X
Category : Business & Economics
Languages : en
Pages : 31
Get Book Here
Book Description
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.
Author: Charles Freedman
Publisher: International Monetary Fund
ISBN: 1451874073
Category : Business & Economics
Languages : en
Pages : 21
Get Book Here
Book Description
This is the fourth chapter of a forthcoming monograph entitled "On Implementing Full-Fledged Inflation- Targeting Regimes: Saying What You Do and Doing What You Say." It examines a number of issues related to transparency and accountability in an inflation-targeting regime. It first looks at the factors behind the move to increased transparency in recent years and the important role of a communications strategy in transparency. It then turns to the role of the forecast in communications, how risks surrounding the forecast are communicated, and whether there should be limits on what is made public. It concludes with a short discussion of accountability.
Author: Charles Freedman
Publisher: International Monetary Fund
ISBN: 145187233X
Category : Business & Economics
Languages : en
Pages : 27
Get Book Here
Book Description
This is the second chapter of a forthcoming monograph entitled "On Implementing Full-Fledged Inflation-Targeting Regimes: Saying What You Do and Doing What You Say." We begin by discussing the costs of inflation, including their role in generating boom-bust cycles. Following a general discussion of the need for a nominal anchor, we describe a specific type of monetary anchor, the inflation-targeting regime, and its two key intellectual roots-the absence of long-run trade-offs and the time-inconsistency problem. We conclude by providing a brief introduction to the way in which inflation targeting works.
Author: Mr.Mark R. Stone
Publisher: International Monetary Fund
ISBN: 1451842929
Category : Business & Economics
Languages : en
Pages : 31
Get Book Here
Book Description
Inflation targeting lite (ITL) countries float their exchange rate and announce an inflation target, but are not able to maintain the inflation target as the foremost policy objective. This paper identifies 19 emerging market countries as practitioners of ITL. They seem to focus mainly on bringing inflation into the single digits and maintaining financial stability. ITL can be viewed as a transitional regime aimed at buying time for the implementation of the structural reforms needed for a single credible nominal anchor. The important policy challenges for an ITL central bank include whether or not to precommit to a single anchor.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1498343694
Category : Business & Economics
Languages : en
Pages : 61
Get Book Here
Book Description
With single-digit inflation and substantial financial deepening, developing countries are adopting more flexible and forward-looking monetary policy frameworks and ascribing a greater role to policy interest rates and inflation objectives. While some countries have adopted formal inflation targeting regimes, others have developed frameworks with greater target flexibility to accommodate changing money demand, use of policy rates to signal the monetary policy stance, and implicit inflation targets.
Author: Peter J. N. Sinclair
Publisher: Routledge
ISBN: 1135179778
Category : Business & Economics
Languages : en
Pages : 402
Get Book Here
Book Description
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.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 9781557757326
Category : Business & Economics
Languages : en
Pages : 174
Get Book Here
Book Description
Australia's recent economic performance has been impressive. It has experienced steady growth since the early 1990s and inflation has averaged just 2 percent over the same period. This strong showing marks a departure from the performance of the postwar years, when falling productivity and rising inflation caused Australia's per capita income to slip from one of the highest among OECD countries to merely average. This economic turnaround is explored in this book edited by Anoop Singh, Josh Felman, Ray Brooks, Tim Callen, and Christian Thimann of the Asia and Pacific Department.
Author: Mr.Pierre Dhonte
Publisher: International Monetary Fund
ISBN: 1451974426
Category : Business & Economics
Languages : en
Pages : 18
Get Book Here
Book Description
Fund member countries that adopt market-friendly policies often encounter a credibility problem—market-friendly policies are not effective in stimulating private investment as long as there remains a significant risk of policy reversal. The root of this risk lies in the discretionary policy-making authority of governments. Committing to a program with the Fund, and endorsing its conditionality, is one instrument available to governments to overcome this difficulty. The paper develops this interpretation of conditionality and indicates some of its operational implications for Fund programs.
Author: Mr.Chadi Abdallah
Publisher: International Monetary Fund
ISBN: 1513546090
Category : Business & Economics
Languages : en
Pages : 31
Get Book Here
Book Description
We estimate the dynamic effects of changes in retail energy prices on inflation using a novel monthly database, covering 110 countries over 2000:M1 to 2016:M6. We find that (i) inflation responds positively to retail energy price shocks, with effects being, on average, modest and transitory. However, our results suggest significant heterogeneity in the response of inflation to these shocks owing to differences in factors related to labor market flexibility, energy intensity, and monetary policy credibility. We also find compelling evidence of asymmetric effects—under sufficiently large shocks—in the case of high-income and low-income countries, with increases in retail fuel prices inducing larger effects on inflation than decreases in fuel prices.
Author: Rania A. Al-Mashat
Publisher: International Monetary Fund
ISBN: 1484379535
Category : Business & Economics
Languages : en
Pages : 72
Get Book Here
Book Description
This paper develops a new central bank transparency index for inflation-targeting central banks (CBT-IT index). It applies the CBT-IT index to the Czech National Bank (CNB), one of the most transparent inflation-targeting central banks. The CNB has invested heavily in developing a Forecasting and Policy Analysis System (FPAS) to implement a full-fledged inflation-forecast-targeting (IFT) regime. The components of CBT-IT index include measures of transparency about monetary policy objectives, the FPAS designed to support IFT, and the monetary policymaking process. For the CNB, all three components have shown substantial improvements over time but a few gaps remain. The CNB is currently working on eliminating some of these gaps.
