Author:
Publisher:
ISBN:
Category : Inflation (Finance)
Languages : en
Pages : 314

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Author: Don Fullerton
Publisher:
ISBN:
Category : Corporations
Languages : en
Pages : 36

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Book Description
Alternative corporate tax systems differ in their ability to adapt to changes in the rate of inflation. Absent complete indexing of depreciation allowances, a tax system may use the expected inflation rate to set accelerated depreciation allowances in a way that minimizes the welfare loss from them is allocation of capital. This welfare loss is a nonlinear function of the assumed inflation rate, however, so the welfare loss at the expected inflation rate may be quite different from the expected welfare loss. We compute these two welfare concepts for each of three alternative corporate tax schemes in the U.S. and for two different relationships between inflation and interest rates. One important finding is that the Auerbach-Jorgenson first year recovery plan is not equivalent to indexing as is often claimed, if uncertainty about inflation implies uncertainty about the real after-tax discount rate.

Author: William T. Loomis
Publisher: University of Michigan Press
ISBN: 9780472108039
Category : Business & Economics
Languages : en
Pages : 432

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A seminal reference and analysis of wages and costs in Athens

Author: Peter J. N. Sinclair
Publisher: Routledge
ISBN: 1135179778
Category : Business & Economics
Languages : en
Pages : 402

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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: Mr.Etienne B. Yehoue
Publisher: International Monetary Fund
ISBN: 147550537X
Category : Business & Economics
Languages : en
Pages : 36

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Book Description
The financial crisis in the advanced countries that began in 2007 has led central bankers to adopt unconventional policy measures as policy interest rates neared the zero bound. One suggestion (Blanchard, Dell’Ariccia, and Mauro, 2010) has been to raise inflation targets to provide more room for policy rate easing during crises. This paper addresses a different issue: the relationship between inflation and welfare. The literature is surveyed and a model is developed. A key conclusion is that an increase in inflation targets gives rise to additional welfare costs, even after the extra room to maneuver above the zero lower bound for nominal policy rates is taken into account. Based on parameter values that fit U.S. data, the additional welfare costs of raising inflation targets from 2 to 4 percent are estimated at about 0.3 percent of annual real income. A rise to 10 percent would yield additional welfare costs of about 1 percent of real income. Other parameter values yield welfare costs as high as 7 (respectively 30) percent of real income for raising inflation targets from 2 to 4 (respectively from 2 to 10) percent. The full costs of raising inflation targets are likely to be higher because the model used to generate these estimates does not account for higher inflation-induced volatility.

Author: Yoichi Matsubayashi
Publisher: Springer Nature
ISBN: 9811641463
Category : Business & Economics
Languages : en
Pages : 70

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Book Description
This book provides an interesting review of Japanese monetary policies after the bubble economy. The Bank of Japan was the first central bank in advanced economies to implement the unconventional monetary policies during the period. After the Lehman shock, most advanced economies also carried out similar monetary policies to boost their own economies. The Japanese experience in the 1990s and 2000s no doubt played a key role during the period. Although various aspects of the experiences have been examined, not many books have been published based on intensive discussions between the macro and monetary theorists who have been active in academics and the practitioners who have actually been involved in monetary policy. This small but important book has focused on the Japanese experience. Evaluation of that experience found that three solid pillars are of crucial importance: theory, institution, and experience. Those form the basis of the book, without theory, no policies will be formulated and implemented, and implementation depends crucially on institution. Chapter 1 provides a clear theoretical background for the unconventional monetary policies and inflation targeting. Chapter 2 intensively explores the meaning and desirability of the independence of central banks. Chapter 3 reviews the consequences of the Japanese monetary policies in recent decades in comparison with those in other advanced economies.

Author: Charles Freedman
Publisher: International Monetary Fund
ISBN: 145187233X
Category : Business & Economics
Languages : en
Pages : 27

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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: Erik Lundberg
Publisher: Springer
ISBN: 1349032603
Category : Business & Economics
Languages : en
Pages : 554

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Author: A. Leijonhufvud
Publisher: Palgrave Macmillan
ISBN: 9780333748923
Category : Business & Economics
Languages : en
Pages : 271

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Book Description
Since the inflationary 1970s, theoretical work on monetary policy has concentrated almost exclusively on price-level stabilization and the avoidance of nominal shocks. In the aftermath of the collapse of financial bubbles in various parts of the world, the accomplishments and limitations of this dominant approach are debated in this volume edited by Axel Leijonhufvud, with contributions by a number of noted monetary economists, including Nobel Laureate Robert Lucas.

Author: Carlos Fernandez Valdovinos
Publisher: International Monetary Fund
ISBN: 1455221031
Category : Business & Economics
Languages : en
Pages : 46

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Book Description
Using a consistent dataset and methodology for all eight member countries of the West African Economic and Monetary Union (WAEMU) from 1994 to 2009, this paper provides evidence of the two major channels for real effects of inflation: inflation uncertainty and relative price variability. In line with theory and most evidence for advanced and emerging market economies, higher inflation increases inflation uncertainty and relative price variability in all WAEMU countries. However, the pattern, magnitude and timing of these two channels vary considerably by country. The findings raise several policy issues for future research.