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Author: Sean Holly
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 12
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Author: Sean Holly
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 12
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Author: David Fielding
Publisher:
ISBN:
Category : Inflation (Finance)
Languages : en
Pages : 48
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Author: Massimo Caruso
Publisher:
ISBN:
Category :
Languages : en
Pages : 84
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Author: Sartaj Rasool Rather
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Unlike earlier literature that documented positive association between inflation and the dispersion of relative prices over time, the empirical evidence from this study suggests that the relative price dispersion increases in response to the deviation of inflation from certain threshold/target level in either direction rather than inflation per se. The striking feature of the empirical evidence from United States and Japan is that the inflation rate at which the dispersion of relative prices is minimised turn out to be 4%; hence, supporting the proposal of 4% inflation target for both the countries.
Author: Theresa Christine Van Hoomissen
Publisher:
ISBN:
Category :
Languages : en
Pages : 296
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Author: Tatiana Damjanovic
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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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.
Author: David C. Parsley
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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We examine the link between inflation and the variability of relative prices in U.S. equity markets and in U.S. goods and services markets. We find strong, comparable links in both sets of markets. This finding represents a puzzle since conventional wisdom ? derived from menu cost or imperfect information models ? is not compelling in equity markets. We next examine whether we can attribute the results to small sample biases. We do find an important but generally overlooked bias that is present in many existing studies. However, the bias is too small to explain our own findings, and the puzzle remains.
Author: Sascha Becker
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Recent monetary search and Calvo-type models predict that the relationship between inflation and price dispersion is U-shaped, implying an optimal rate of inflation above zero. Moreover, monetary search models emphasize a critical dependence of the real effects of inflation on sellers' market power, whereas Calvotype models suggest that the degree of price rigidity significantly affects the inflation - price dispersion nexus. Using a new set of highly disaggregated sectoral price data from a panel of European countries, this paper contributes to the literature by testing the empirical relevance of these two theoretical predictions. In line with monetary search theory, a U-shaped profile is found, provided that markups are sufficiently high, but the relationship breaks down under a more competitive environment. Contrarily, no evidence is found to support the contentions of Calvo-type models: U-shaped effects of inflation occur in product sectors with sticky as well as highly flexible prices. -- Inflation ; Relative price variability ; Price level index ; Euro-area ; Market structure ; Monetary search model ; Dynamic panel data models
Author: David J. Stockton
Publisher:
ISBN:
Category : Inflation (Finance)
Languages : en
Pages : 70
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Author: J. Joseph Beaulieu
Publisher:
ISBN:
Category :
Languages : en
Pages : 62
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