Relative Prices as Aggregate Supply Shocks with Trend Inflation PDF Download
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Author:
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Languages : en
Pages :
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Author:
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Category :
Languages : en
Pages :
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Author: Laurence M. Ball
Publisher:
ISBN:
Category : Inflation (Finance)
Languages : en
Pages : 40
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Book Description
Author: Alan S. Blinder
Publisher: Elsevier
ISBN: 1483264564
Category : Business & Economics
Languages : en
Pages : 244
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Book Description
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.
Author: Hiranya K. Nath
Publisher:
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Languages : en
Pages :
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This paper estimates a fixed effects regression model using panel data on prices for U.S. cities to test the supply-side theory of inflation that takes the distribution of relative price changes as an aggregate supply shock. The results indicate that the positive correlation between inflation and relative price variability is a robust empirical regularity that gives some credibility to the supplyside theory of inflation. During the early 1980s this relationship, though positive, weakens which indicates predominance of monetary shocks in determining changes in the aggregate price level. On the other hand, inflation and skewness are not found to be strongly related when aggregate macroeconomic effects are controlled.
Author: Richard T. Froyen
Publisher:
ISBN:
Category : Demand (Economic theory)
Languages : en
Pages : 78
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Book Description
This paper examines the shift in the relation between the inflation rate and the rate of growth of real output which has occurred in the United States over the past three decades, and attempts to assess the relative importance of three possible lines of explanation: a) the new classical view of the output-inflation tradeoff, initially specified by Lucas;b) the effect of supply-side shocks, such as energy prices; c) the effect of inflation variability on the natural rate of real output, as hypothesized by Milton Friedman. The paper concludes that b) and c) seem to have played a significant role in the observed shift from a positive to a negative correlation between the rate of inflation and the rate of real output growth,but that a) did not.
Author: Michael D. Bordo
Publisher: University of Chicago Press
ISBN: 0226066959
Category : Business & Economics
Languages : en
Pages : 545
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Book Description
Controlling inflation is among the most important objectives of economic policy. By maintaining price stability, policy makers are able to reduce uncertainty, improve price-monitoring mechanisms, and facilitate more efficient planning and allocation of resources, thereby raising productivity. This volume focuses on understanding the causes of the Great Inflation of the 1970s and ’80s, which saw rising inflation in many nations, and which propelled interest rates across the developing world into the double digits. In the decades since, the immediate cause of the period’s rise in inflation has been the subject of considerable debate. Among the areas of contention are the role of monetary policy in driving inflation and the implications this had both for policy design and for evaluating the performance of those who set the policy. Here, contributors map monetary policy from the 1960s to the present, shedding light on the ways in which the lessons of the Great Inflation were absorbed and applied to today’s global and increasingly complex economic environment.
Author:
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 45
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Author: Sartaj Rasool Rather
Publisher: LAP Lambert Academic Publishing
ISBN: 9783659414084
Category :
Languages : en
Pages : 60
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Book Description
It widely believed that the rate of inflation in the long run is determined by growth rate of money supply. However, the short run dynamics of inflation is more complicated in nature. The past experience of inflation dynamics shows that the rate of inflation fluctuates around its underlying trend in the short-run. In literature these short-run fluctuations in rate of inflation are mainly attributed to changes in relative prices of certain commodities due to supply shocks. In this context, examining the effects these shocks on the distribution of price changes has gained importance so as to understand these transitory deviations in inflation. In this backdrop, this book examines whether variations in skewness of distribution of relative price changes influence the aggregate inflation.The empirical analysis is carried out by using commodity wise Wholesale Price Index data from India. Further various theoretical paradigms underlying this relationship are also discussed.
Author: Alan S. Blinder
Publisher: New York; Toronto : Academic Press
ISBN:
Category : Business & Economics
Languages : en
Pages : 256
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Book Description
Monograph using economic theory to analyse errors in economic policy leading to economic recession and inflation in the USA during 1971 to 1976 - outlines basic concepts of stagflation such as aggregate supply and demand analysis and the trade-off between inflation and unemployment, examines recession dynamics (productivity, consumption and investment problems) and effects of rising prices, and presents economic analysis of wages-price controls, fiscal policy and monetary policy. Bibliography pp. 219 to 223 and graphs.
Author: Shruti Tripathi
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The paper examines how relative price shocks can affect the price level and then inflation. Using Indian data, it is observed that: (1) Price increases exceed price decreases. Aggregate inflation depends on the distribution of relative price changes -- inflation rises when the distribution is skewed to the right; (2) Such distribution-based measures of supply shocks perform better than the traditional measures, such as prices of energy and food. They moderate the price puzzle, whereby a rise in policy rates increases inflation, are significant in estimations of New Keynesian aggregate supply, and show the Indian aggregate supply curve to be flat, but subject to shifts; (3) An average Indian firm changes prices about once in a year. The estimated Calvo parameter implies that half of the Indian firms reset their prices in any period, while 66% of firms are forward looking in their price setting. These estimated real and nominal price rigidities imply policy needs to anchor inflationary expectations in response to supply shocks, but policy responses must be moderate.
