[PDF] Implications Of Uncertainty About Long Run Inflation And The Price Level eBook

Author : Bank of Canada
Publisher :
Page : 28 pages
File Size : 26,41 MB
Release : 2001
Category : Inflation (Finance)
ISBN :

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This paper surveys recent developments in the theoretical and empirical literature on the economic implications of uncertainty about the longer-term outlook for inflation. In particular, the linkages between inflation, long-run inflation uncertainty, and aggregate economic activity in industrial economies have become considerably better understood during the past decade In the case of Canada, there is evidence that uncertainty about long-run inflation fell considerably between the high-inflation period of the 1970s and early 1980s and the subsequent moderate-inflation period, and decreased still further in the low-inflation period that has been evident since the early 1990s. As a result, both businesses and households have increasingly used longer-term financial instruments to meet their financing needs over the past two decades. In general, recent empirical work for Canada and elsewhere considerably strengthens the view that reductions in long-run inflation uncertainty can have beneficial effects on financial markets, capital spending, and ultimately aggregate levels of economic activity. Recent theoretical developments have improved our understanding of why this is so.

Author : Peter J. N. Sinclair
Publisher : Routledge
Page : 402 pages
File Size : 47,14 MB
Release : 2009-12-16
Category : Business & Economics
ISBN : 1135179778

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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 : Michael D. Bordo
Publisher : University of Chicago Press
Page : 545 pages
File Size : 41,83 MB
Release : 2013-06-28
Category : Business & Economics
ISBN : 0226066959

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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 : Sangyup Choi
Publisher : International Monetary Fund
Page : 26 pages
File Size : 30,89 MB
Release : 2015-02-23
Category : Business & Economics
ISBN : 1498356303

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We study the role of uncertainty shocks in explaining unemployment dynamics, separating out the role of aggregate and sectoral channels. Using S&P500 data from the first quarter of 1957 to third quarter of 2014, we construct separate indices to measure aggregate and sectoral uncertainty and compare their effects on the unemployment rate in a standard macroeconomic vector autoregressive (VAR) model. We find that aggregate uncertainty leads to an immediate increase in unemployment, with the impact dissipating within a year. In contrast, sectoral uncertainty has a long-lived impact on unemployment, with the peak impact occurring after two years. The results are consistent with a view that the impact of aggregate uncertainty occurs through a “wait-and-see” mechanism while increased sectoral uncertainty raises unemployment by requiring greater reallocation across sectors.

Author : Mark Gertler
Publisher : Mit Press
Page : 432 pages
File Size : 47,89 MB
Release : 2004
Category : Business & Economics
ISBN : 9780262072533

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The NBER Macroeconomics Annual presents pioneering work in macroeconomics by leading academic researchers to an audience of public policymakers and the academic community. Each commissioned paper is followed by comments and discussion. This year's edition provides a mix of cutting-edge research and policy analysis on such topics as productivity and information technology, the increase in wealth inequality, behavioral economics, and inflation.