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... is a situation of persistent and appreciable rise in prices, leading to fall in purchasing power of money. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index over time. Demand Pull Inflation : ...
... is a situation of persistent and appreciable rise in prices, leading to fall in purchasing power of money. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index over time. Demand Pull Inflation : ...
Deflationary shocks and de-anchoring of inflation
... A prolonged period of low inflation, particularly in a situation of monetary policy rates near the zero lower bound, can heighten the risk of inflation expectations de-anchoring from the central bank objective. Indeed, over the recent months, market-based expectations of euro area inflation have pro ...
... A prolonged period of low inflation, particularly in a situation of monetary policy rates near the zero lower bound, can heighten the risk of inflation expectations de-anchoring from the central bank objective. Indeed, over the recent months, market-based expectations of euro area inflation have pro ...
NBER WORKING PAPER SERIES AGGREGATE DEMAND AND SUPPLY Roger E. A. Farmer
... The current dominant interpretation of the General Theory is that of new-Keynesian economics which builds on Patinkin’s (1956) idea that the unemployment equilibrium of the General Theory can be interpreted as a Walrasian general equilibrium in which agents trade at ‘false prices’. My main concern w ...
... The current dominant interpretation of the General Theory is that of new-Keynesian economics which builds on Patinkin’s (1956) idea that the unemployment equilibrium of the General Theory can be interpreted as a Walrasian general equilibrium in which agents trade at ‘false prices’. My main concern w ...
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... tends to focus on the short-run fluctuations in the natural rate, taking the long-run value as constant. In the latter approach, the real natural rate is the inflation-adjusted rate of interest that would prevail after wages and prices adjust to drive economic activity to its most efficient level, m ...
... tends to focus on the short-run fluctuations in the natural rate, taking the long-run value as constant. In the latter approach, the real natural rate is the inflation-adjusted rate of interest that would prevail after wages and prices adjust to drive economic activity to its most efficient level, m ...
The unemployment rate is the number of people
... cases. For example, in some months, a falling unemployment rate was accompanied by a slight fall in employment. How can the number of individuals employed fall and the unemployment rate fall at the same time? This must mean that the number of individuals unemployed fell also. Most likely, what has h ...
... cases. For example, in some months, a falling unemployment rate was accompanied by a slight fall in employment. How can the number of individuals employed fall and the unemployment rate fall at the same time? This must mean that the number of individuals unemployed fell also. Most likely, what has h ...
A soft commitment to overshoot the inflation objective
... from the FOMC thereby driving up bond yields which would weigh on the real economy 8 . The statement mentioned above that the 2% inflation objective is not a ceiling expresses this concern. It is an implicit commitment to accept slightly higher inflation thereby echoing insights provided in the Kile ...
... from the FOMC thereby driving up bond yields which would weigh on the real economy 8 . The statement mentioned above that the 2% inflation objective is not a ceiling expresses this concern. It is an implicit commitment to accept slightly higher inflation thereby echoing insights provided in the Kile ...
Paper - Heterodox Economics Newsletter
... Steven Farrazi suggests that the term ‘microfoundations’ has come into discussions of Post Keynesian theory from neoclassical analysis. In broad sense, microfoundations are about the behavioral requirements or conditions for individual economic actors in macroeconomic models and behavioral requisite ...
... Steven Farrazi suggests that the term ‘microfoundations’ has come into discussions of Post Keynesian theory from neoclassical analysis. In broad sense, microfoundations are about the behavioral requirements or conditions for individual economic actors in macroeconomic models and behavioral requisite ...
Is There a Stable Relationship between Unemployment and Future
... inflation rate of unemployment) model is assumed to be true, regional data can be used to identify the structural relationship between unemployment and future inflation. The empirical analysis of the regional data is remarkably consistent with the stability of the parameters in the assumed model. In ...
... inflation rate of unemployment) model is assumed to be true, regional data can be used to identify the structural relationship between unemployment and future inflation. The empirical analysis of the regional data is remarkably consistent with the stability of the parameters in the assumed model. In ...
Chapter 15
... 6. What Happened to Money? Money plays no role in the RBC theory; the theory emphasizes that real things, not nominal or monetary things, cause business cycles. 7. Cycles and Growth: The shock that drives the cycle in RBC is the same force as generates economic growth, technological change. RBC con ...
... 6. What Happened to Money? Money plays no role in the RBC theory; the theory emphasizes that real things, not nominal or monetary things, cause business cycles. 7. Cycles and Growth: The shock that drives the cycle in RBC is the same force as generates economic growth, technological change. RBC con ...
Some Current Controversies in the Theory of Inflation
... usually trying to catch up with general inflation. Such catch-up price increases should not be interpreted as inflation-generating Similarly, when unions raise wages, they are price increases.. often just trying to catch up with past price increases or protect wages from expected future price increa ...
... usually trying to catch up with general inflation. Such catch-up price increases should not be interpreted as inflation-generating Similarly, when unions raise wages, they are price increases.. often just trying to catch up with past price increases or protect wages from expected future price increa ...
Keynes’s Monetary Theory: A Different Jnterpretation Allan H. Meltzer
... capital stock exerted a negative influence on real activity via its depressing effect on rates of return and the inducement to invest. In ignoring this point and arguing that Keynes believed the existing capital stock was too small to absorb the labor force, Meltzer comes close to attributing to Key ...
... capital stock exerted a negative influence on real activity via its depressing effect on rates of return and the inducement to invest. In ignoring this point and arguing that Keynes believed the existing capital stock was too small to absorb the labor force, Meltzer comes close to attributing to Key ...
Inflation Dynamics During and After the Zero Lower Bound Introduction
... From an ex ante perspective, the costs and benefits of the policy have to be weighted by the probability of reaching the zero lower bound. As we mentioned before, conditional on being in the targeted-inflation regime, this probability is very small, even under a 2 2.5% target rate. Thus, the costs a ...
... From an ex ante perspective, the costs and benefits of the policy have to be weighted by the probability of reaching the zero lower bound. As we mentioned before, conditional on being in the targeted-inflation regime, this probability is very small, even under a 2 2.5% target rate. Thus, the costs a ...
Finding the Equilibrium Real Interest Rate in a Fog
... of the DSGE studies have focused on short-run equilibria that depend on economic shocks rather than the mediumor longer-run levels that are reached when the effects of shocks have been partly or fully resolved. ...
... of the DSGE studies have focused on short-run equilibria that depend on economic shocks rather than the mediumor longer-run levels that are reached when the effects of shocks have been partly or fully resolved. ...
Edmund Phelps
Edmund Strother Phelps, Jr. (born July 26, 1933) is an American economist and the winner of the 2006 Nobel Memorial Prize in Economic Sciences. Early in his career he became renowned for his research at Yale's Cowles Foundation in the first half of the 1960s on the sources of economic growth. His demonstration of the Golden Rule savings rate, a concept first devised by John von Neumann and Maurice Allais, started a wave of research on how much a nation ought to spend on present consumption rather than save and invest for future generations. His most seminal work inserted a microfoundation—one featuring imperfect information, incomplete knowledge and expectations about wages and prices—to support a macroeconomic theory of employment determination and price-wage dynamics. This led to his development of the natural rate of unemployment—its existence and the mechanism governing its size.Phelps has been McVickar Professor of Political Economy at Columbia University since 1982. He is also the director of Columbia's Center on Capitalism and Society.