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Author: Greg Kaplan
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 36
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Book Description
We use scanner data to estimate inflation rates at the household level. Households' inflation rates are remarkably heterogeneous, with an interquartile range that varies between 6.2 and 9.0 percentage points on an annual basis. Most of the heterogeneity comes not from variation in broadly defined consumption bundles but from variation in prices paid for the same types of goods -- a source of variation that previous research has not measured. The entire distribution of household inflation rates shifts in parallel with aggregate inflation. Deviations from aggregate inflation exhibit only slightly negative serial correlation within each household over time, implying that the difference between a household's price level and the aggregate price level is persistent. Together, the large cross-sectional dispersion and low serial correlation of household-level inflation rates mean that almost all of the variability in a household's inflation rate over time comes from variability in household-level prices relative to average prices for the same goods, not from variability in the aggregate inflation rate. We provide a characterization of the stochastic process for household inflation that can be used to calibrate models of household decisions.
Author: Greg Kaplan
Publisher:
ISBN:
Category : Consumption (Economics)
Languages : en
Pages : 36
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Book Description
We use scanner data to estimate inflation rates at the household level. Households' inflation rates are remarkably heterogeneous, with an interquartile range that varies between 6.2 and 9.0 percentage points on an annual basis. Most of the heterogeneity comes not from variation in broadly defined consumption bundles but from variation in prices paid for the same types of goods -- a source of variation that previous research has not measured. The entire distribution of household inflation rates shifts in parallel with aggregate inflation. Deviations from aggregate inflation exhibit only slightly negative serial correlation within each household over time, implying that the difference between a household's price level and the aggregate price level is persistent. Together, the large cross-sectional dispersion and low serial correlation of household-level inflation rates mean that almost all of the variability in a household's inflation rate over time comes from variability in household-level prices relative to average prices for the same goods, not from variability in the aggregate inflation rate. We provide a characterization of the stochastic process for household inflation that can be used to calibrate models of household decisions.
Author: Greg Kaplan
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
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: Jacob Orchard
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This project postulates that an additional cost of increased inflation is an increase in the cross-sectional dispersion of household-level inflation rates. Using scanner data and the Consumer Expenditure Survey, I construct novel measures of household-level inflation and show that households experience inflation at very different rates. An increase in a household's personal inflation rate leads to a persistent increase in their price index. Households respond to a personal inflation shock by decreasing nominal consumption, which means that real consumption falls more than one-for-one; poor households are least able to smooth their consumption in response to household inflation shocks. I find that inflation dispersion (the variance of household inflation rates) increases with the level of absolute aggregate inflation. This relationship is robust across time, methodology, and data.
Author: United States. Congress. Senate. Advisory Commission to Study the Consumer Price Index
Publisher:
ISBN:
Category : Consumer price indexes
Languages : en
Pages : 212
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Book Description
Author: Francesco Grigoli
Publisher: International Monetary Fund
ISBN:
Category : Debts, Public
Languages : en
Pages : 30
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Book Description
We use randomized controlled trials in the US, UK, and Brazil to examine the causal effect of public debt on household inflation expectations. We find that people underestimate public debt levels and increase inflation expectations when informed about the correct levels. The extent of the revisions is proportional to the size of the information surprise. Confidence in the central bank considerably reduces the sensitivity of inflation expectations to public debt. We also show that people associate high public debt with stagflationary effects and that the sensitivity of inflation expectations to public debt is considerably higher for women and low-income individuals.
Author: Georg Strasser
Publisher:
ISBN: 9789289961547
Category :
Languages : en
Pages : 0
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Book Description
Inflation affects the purchasing power of households. This paper documents large, idiosyncratic inflation differences between households in their everyday shopping. Low-income households have experienced higher inflation in the last ten years, but the difference for richer households has been small and time varying. Householdspecific behaviour appears to dominate inflation differences within countries. Between countries, multinational retail chains not only differentiate products by branding, but also charge different prices for identical products. Retailers continue to differentiate prices along national borders, even within largely integrated economic regions. Price changes, however, are broadly aligned across borders within the same retailers.
Author: Leo Grebler
Publisher: Free Press
ISBN:
Category : Business & Economics
Languages : en
Pages : 280
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Book Description
Author: James B. Stephenson
Publisher:
ISBN:
Category : Accounting
Languages : en
Pages : 264
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Book Description
Author: Javier E. Baez
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
Inflation is typically measured using aggregate price indices that are based on bundles of goods and services sold or consumed by the "median" agent. In the case of households, in particular, budget shares vary substantially across income and demographic groups. Assessing how inflation behaves at the household level requires understanding how heterogenous changes in consumer prices affect household choices and well-being differently. In recent years, price increases have been particularly high in Turkey, with double-digit inflation starting in 2017 and intensifying in 2018 and 2020 due to exchange rate volatility, macroeconomic instability, and the economic disruption brought about by Covid-19. This paper calculates income-decile price indices to examine the inflation experience across income groups and discusses their implications for household welfare. Households in the first decile allocate nearly 70 percent of their budget to food and housing, twice as much as the corresponding share for the typical household in the upper decile. Inflation measures that consider these heterogeneities in expenditures show a higher burden for the poor in recent inflation episodes driven by rapid increases in food prices (2013, 2015 and 2019). In 2015, for instance, 342,000 additional people would have been deemed poor (an increase of 4.2 percent) had the poverty calculations taken into account the actual inflation experience of poor and vulnerable households. A methodological extension of the World Bank's upper-middle-income poverty line (USD 5.50 2011 purchasing power parity) that takes into consideration the inflation experience of the bottom deciles yields higher poverty rates for Turkey every year between 2011 and 2020.
