INFLATION and ITS CONTROL Everett E
Total Page:16
File Type:pdf, Size:1020Kb
Load more
Recommended publications
-
Principles of Agricultural Economics Credit Hours: 2+0 Prepared By: Dr
Study Material Course No: Ag Econ. 111 Course Title: Principles of Agricultural Economics Credit Hours: 2+0 Prepared By: Dr. Harbans Lal Course Contents: Sr. Topic Aprox.No. No. of Lectures Unit-I 1 Economics: Meaning, Definition, Subject Matter 2 2 Divisions of Economics, Importance of Economics 2 3 Agricultural Economics Meaning, Definition 2 Unit-II 4 Basic concepts (Demand, meaning, definition, kind of demand, demand 3 schedule, demand curve, law of demand, Extension and contraction Vs increase and decrease in demand) 5 Consumption 2 6 Law of Diminishing Marginal Utility meaning, Definition, Assumption, 3 Limitation, Importance Unit-III 7 Indifference curve approach: properties, Application, derivation of demand 3 8 Consumer’s Surplus, Meaning, Definition, Importance 2 9 Definition, Importance, Elasticity of demand, Types, degrees and method of 4 measuring Elasticity, Importance of elasticity of demand Unit-IV 10 National Income: Concepts, Measurement. Public finance: Meaning, Principle, 3 Public revenue 11 Public Revenue: meaning, Service tax, meaning, classification of taxes; 3 Cannons of taxation Unit-V 12 Public Expenditure: Meaning Principles 2 13 Inflation, meaning definition, kind of inflation. 2 Unit-I Lecture No. 1 Economics- Meaning, Definitions and Subject Matter The Economic problem: Economic theory deals with the law and principles which govern the functioning of an economy and it various parts. An economy exists because of two basic facts. Firstly human wants for goods and services are unlimited and secondly productive resources with which to produce goods and services are scarce. In other words, we have the problem of allocating scarce resource so as to achieve the greatest possible satisfaction of wants. -
How to Hedge Against in Ation Risk in Vietnam
How to Hedge Against Ination Risk in Vietnam T. Thanh-Binh Nguyen ( [email protected] ) Chaoyang University of Technology Research Keywords: asymmetric cointegration, gold price, ination hedge, MSI-VAR(1) model, the US dollar, Vietnam. Posted Date: August 2nd, 2021 DOI: https://doi.org/10.21203/rs.3.rs-753285/v1 License: This work is licensed under a Creative Commons Attribution 4.0 International License. Read Full License How to Hedge Against Inflation Risk in Vietnam T.Thanh-Binh, Nguyen* Department of Accounting, Chaoyang University of Technology, 168 Jifong E. Road, Wufong District, Taichung City, 41349, Taiwan E-mail: [email protected] * Corresponding author; Tel.: +886-4-2332-3000 ext 7804. E-mail address: [email protected] How to Hedge Against Inflation Risk in Vietnam Abstract Vietnam has experienced galloping inflation and faced serious dollarization since its reform. To effectively control its inflation for promoting price stability, it is necessary to find efficacious leading indicators and the hedging mechanism. Using monthly data over the period from January 1997 to June 2020, this study finds the predictive power and hedge effectiveness of both gold and the US dollar on inflation in the long-run and short-run within the asymmetric framework. Especially, the response of inflation to the shocks of gold price and the US dollar are quick and decisive, disclosing the sensitiveness of inflation to these two variables. Keywords: asymmetric cointegration, gold price, inflation hedge, MSI-VAR(1) model, the US dollar, Vietnam. JEL classification codes: C22, L85, P44 2 I. Introduction One of the most vital responsibilities of policymakers in several countries is to control inflation for promoting two long-run goals: price stability and sustainable economic growth since inflation connects tightly to the purchasing power of currency within its border and affects its standing on the international markets. -
European University Institute. Digitised Version Produced by the EUI Library in 2020
EUROPEAN UNIVERSITY INSTITUTE, FLORENCE DEPARTMENT OF ECONOMICS Repository. Research Institute 320 University European Institute. E U I WORKING Cadmus, on INSTABILITY AND INDEXATION IN A LABOUR- MANAGED ECONOMY - A GENERAL EQUILIBRIUM University QUANTITY RATIONING APPROACH Access by it ick European Will Bartlett and Gerd Weinrich Open Author(s). Available içit The 2020. European University Institute University of Western Ontario © Badia Fiesolana Department of Economics in 50016 S. Domenico di Fiesole Social Science Centre Italy London, Canada N6A 5C2 Library EUI This paper was written while the second author was a Jean Monnet Fellow the at the European University Institute and presented at the Fourth Inter by national Conference on the Economics of Self-Management in Liège, Belgium, July 15-17, 1985. produced version BADIA FIESOLANA, SAN DOMENICO (FI) Digitised Repository. Research Institute University European Institute. Cadmus, on University Access European Open Printed in Italy in September 1985 Printed Italy September 1985 in in (C) Weinrich Will Gerd Bartlett and (C) reproduced in any form without without any reproduced form in No part may No part be of paper this European University Institute University European Institute - 50016 San Domenico (FI) Domenico - - San 50016 (FI) Author(s). Available permission of of author. permission the All rights All rights reserved. The 2020. Badia Fiesolana Badia Fiesolana © in Italy Library EUI the by produced version Digitised Repository. Research Institute University European managed economy based upon the general equilibrium quantity ra may lead to highly perverse and unstable price dynamics, as en Abstract households seek to maximize utility in consumption and leisure cient level of activity. -
'1E and on the Giannini Foundation J'
l i37 AGRICULTURAL ECONOMICS LIBRARY UNIVERSITY OF CALIFORNIA DAVIS, CALIF. 95616 University of California College of Agriculture Agricultural Experiment Station Berkeley, California ii. I ! J INFLATION AND AGRICULTURE by J. M.lTinley Associate Professor of Agricultural Economics, ~tk Associate Agricultural Economist in the Experiment Station '1e and on the Giannini Foundation j'. ' - A Paper Presented at the Annual Meeting of the Western Farm Economics Association,, Reno" Nevada June 23, 24, and 25, 1937 re INFLATION AND AGRICULTURE J. M. Tinley College of Agriculture University of California What is inflation? The Encyclopaedia of tho Social Sc.iences states that the meaning an economist associates with the terms "inflation" or its opposite, "deflation," is apt to vary in accordance with his views regarding the money-credit-price mechanism. It then proceeds to enumerate a dozen or more definitions or variations of definitions by economists like Keynes, Cassels, and Laughlin. Still other definitions are given by Kemmerer, Hardy, and Mohr. To be in style I shall be presumptious enough to present my own dofinition or rather understanding of the term. The layman usually applies the terms inflation and deflation to increases or decreases in the general level of prices, regardless of the causes of such changes. Economists, however, usually apply the terms mainly to rapid price changes originating on the money•credit side of tho equation of exchange - changes in the volume of circulating media (including velocity) in relation to the volume of trade. Within recent years some economists (especially some New Deal economists) have given the terms a somewhat new meaning. They visualize some sort of a norm or stubiltzod price level. -
The Austrian Theory of Money by Murray N
The Austrian Theory of Money By Murray N. Rothbard [Reprinted from The Foundations of Modern Austrian Economics, Edwin Dolan, ed. (Kansas City: Sheed Andrews and McMeel, 1976), pp. 160-84.; The Logic of Action One: Method, Money, and the Austrian School (Cheltenham, UK: Edward Elgar, 1997), pp. 297-320. The pagination on this edition corresponds to the Logic edition.] The Austrian theory of money virtually begins and ends with Ludwig von Mises's monumental Theory of Money and Credit, published in 1912.1 Mises's fundamental accomplishment was to take the theory of marginal utility, built up by Austrian economists and other marginalists as the explanation for consumer demand and market price, and apply it to the demand for and the value, or the price, of money. No longer did the theory of money need to be separated from the general economic theory of individual action and utility, of supply, demand, and price; no longer did monetary theory have to suffer isolation in a context of "velocities of circulation," "price levels," and "equations of exchange." In applying the analysis of supply and demand to money, Mises used the Wicksteedian concept: supply is the total stock of a commodity at any given time; and demand is the total market demand to gain and hold cash balances, built up out of the marginal-utility rankings of units of money on the value scales of individuals on the market. The Wicksteedian concept is particularly appropriate to money for several reasons: first, because the supply of money is either extremely durable in relation to current production, as under the gold standard, or is determined exogenously to the market by government authority; and, second and most important, because money, uniquely among commodities desired and demanded on the market, is acquired not to be consumed, but to be held for later exchange. -
Measures of Underlying Inflation and Their Role in the Conduct of Monetary Policy
PROCEEDINGS June 1999 MEASURES OF UNDERLYING INFLATION AND THEIR ROLE IN THE CONDUCT OF MONETARY POLICY Proceedings of the workshop of central bank model builders held at the BIS on 18-19 February 1999 BANK FOR INTERNATIONAL SETTLEMENTS Monetary and Economic Department Basel, Switzerland Note: The papers included in this volume are to be considered as working papers. They should be cited as working papers and considered preliminary drafts of any subsequent publication. They are reproduced here to make them easily available to anyone having an interest in the subject of the workshop because participation in the workshop is restricted to central banks. Although all papers have been screened for relevance to the subject matter of the workshop, they have not been subject to a rigorous refereeing process nor edited for form or content by the Bank for International Settlements. Copies of publications are available from: Bank for International Settlements Information, Press & Library Services CH-4002 Basel, Switzerland Fax: +41 61 / 280 91 00 and +41 61 / 280 81 00 This publication is available on the BIS website (www.bis.org). © Bank for International Settlements 1999. All rights reserved. Brief excerpts may be reproduced or translated provided the source is stated. ISBN 92-9131-072-7 PROCEEDINGS June 1999 MEASURES OF UNDERLYING INFLATION AND THEIR ROLE IN THE CONDUCT OF MONETARY POLICY Proceedings of the workshop of central bank model builders held at the BIS on 18-19 February 1999 BANK FOR INTERNATIONAL SETTLEMENTS Monetary and Economic Department -
Types and Strains of Inflation
RESERVE BANK OF FIJI ECONOMIC FOCUS `Types and Strains of Inflation Inflation is the general increase in prices of will not make investments that yield returns goods and services. As prices go up, the same that are below the inflation rate. amount of money buys fewer goods and services. The rate at which money loses its Inflation in Fiji value depends on the rate of inflation. According to the International Monetary Fund, % there are three levels of inflation: low-to- 10 moderate, galloping and hyperinflation. 8 Low-to-moderate inflation is when the prices of 6 goods and services rise slowly over time. As a 4 result, people are more willing to save their 10 year average = 2.8 money because the value of their savings is not 2 eroded by high inflation. At the same time, businesses prefer to enter into long-term 0 contracts because they do not expect prices to 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 rise quickly in the future. Source: Bureau of Statistics Fiji experiences low-to-moderate inflation. A more extreme case of increase in prices is (See graph). Since around 60 percent of goods known as hyperinflation. At this level, inflation and services are imported, our domestic prices stands at the rate of a thousand, a million or even are affected directly or indirectly through a billion percent per year. Prices can be rising changes in the prices of our imports. Fiji’s low even during the day. Hyperinflation is inflation environment is supported by two disastrous to an economy. -
Core Inflation: a Review of Some Conceptual Issues
II Core Inflation: A Review of Some Conceptual Issues Mark A. Wynne This paper reviews various approaches to the measurement of core inflation that have been pro- posed over the years using the stochastic approach to index numbers as a unifying framework. It begins with a review of how the concept of core inflation is used by the world’s major central banks, including some of the inflation-targeting central banks. The author provides a comprehensive review of many of the measures of core inflation that have been developed over the years and highlights some of the conceptual and practical problems associated with them. (JEL E31, C43) Federal Reserve Bank of St. Louis Review, May/June 2008, 90(3, Part 2), pp. 205-28. he notion of core inflation has played In this paper I critically review various an important role in the deliberations approaches to measuring core inflation by linking of monetary policymakers for the past these approaches in a single theoretical frame- 25 years. However, despite the central work, the so-called stochastic approach to index Trole of this concept, there is still no consensus numbers. I evaluate the competing merits of the on how best to go about measuring core inflation. different approaches and argue that a common The most elementary approach, and the one that shortcoming is the absence of a well-formulated is probably the most widely used, consists of theory of what these measures of inflation are simply excluding certain categories of prices from supposed to be capturing. The notion that they the overall inflation rate. -
Core Inflation: a Review of Some Conceptual Issues*
CORE INFLATION: A REVIEW OF SOME CONCEPTUAL ISSUES* Mark A. Wynne DG Research European Central Bank Kaiserstraße 29 60311 Frankfurt am Main April 1999 Core Inflation: A Review of Some Conceptual Issues Abstract: This paper reviews various approaches to the measurement of core inflation that have been proposed in recent years. The objective is to determine whether the ECB should pay special attention to one or other of these measures in assessing inflation developments in the euro area. I put particular emphasis on the conceptual and practical problems that arise in the measurement of core inflation, and propose some criteria that could be used by the ECB to choose a core inflation measure. * I thank Vítor Gaspar, David Lebow, Fabio Scacciavillani and seminar participants at the ECB for comments. This paper is part of a larger project on the measurement of core inflation in the euro area. The views expressed in this paper are those of the author and do not necessarily reflect the views of the European Central Bank or the European System of Central Banks. 1 1. INTRODUCTION The notion of core inflation has played an important role in the deliberations of monetary policymakers for the past twenty-five years. However, despite the central role of this concept, there is still no consensus on how best to go about measuring core inflation. The most elementary approach, and the one that is probably the most widely used, consists of simply excluding certain categories of prices from the overall inflation rate. This is the so-called “Ex. food and energy” approach to core inflation measurement, and it reflects the origin of the concept of core inflation in the turbulent decade of the 1970’s. -
Effects of Inflation Targeting Policy on Inflation Rates and Gross Domestic Product in Ghana
European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.6, No.21, 2014 Effects of Inflation Targeting Policy on Inflation Rates and Gross Domestic Product in Ghana Albert Puni Department of Administration, University of Professional Studies, Accra, P.O. Box LG 149, Legon Bright Addiyiah Osei Research Centre, University of Professional Studies, Accra, P.O.Box LG 149, Legon Email:[email protected] Charles Barnor Department of Banking and Finance, University of Professional Studies, Accra, P.O. Box LG 149, Legon Abstract Inflation targeting has been widely adopted in both developed and developing economies. The Bank of Ghana (BOG) formally adopted an inflation targeting regime as a major monetary policy framework in May 2007, becoming the second African country to do so after South Africa. This research paper sought to investigate the effect of inflation targeting policy on inflation rates and gross domestic product. The research adopted the quantitative method by comparing the effect of inflation targeting policy on inflation rates and gross domestic product in the pre inflation targeting period (2000-2006) and the post inflation targeting period (2007-2013). The resultsrevealed that there was a significant difference between the mean inflation rates for the two periods. The inflation rate for the post inflation targeting period is significantly less than the pre-inflation targeting period. It was also revealed that inflation targeting did not have a statistically significant effect on economic growth in Ghana. The study concluded that policy makers are encouraged to explore other policy alternative including inflation targeting regime to maximize production in the economy. -
Austrian Economics Golden Opportunities Fund
Austrian Economics Golden Opportunities Fund Prepared for Inflation And Deflation Ronald-Peter Stöferle & Mark J. Valek Executive Summary I Quo Vadis… The Fund and its Objectives ► Real (inflation-adjusted) growth in uncertain times ► Active protection against Inflation/Deflation ► Absolute Return, Global Macro approach ► Target return 8% p.a. ► Modest Drawdown-Risk (Ø Volatility between 10 and 12%) ► Diversification to traditional bond and equity portfolios …Inflation or Deflation? Our Investment Approach ► Identifying the respective inflation momentum utilizing the „Incrementum-Inflation-Signal“. ► Strategies are implemented based on our know-how in the Inflation/Deflation portfolio via precious metals, equities and commodities. ► Budget for tactical opportunities for other themes using Austrian School perspective. Sources: Societe Generale, Incrementum AG 2 Executive Summary II Austrian Economics for Investors Our Investment Philosophy ► Insights of the Austrian School of Economics are the intellectual foundation of our macro-analyses. ► In contrast to traditional tenets the Austrian School recognizes the “fiat money” and fractional reserve banking system as the major cause of the ongoing crisis. Conservative Risk Profile Characteristics of the Fund ► No benchmark, Absolute Return approach ► Active asset allocation for Inflation or Deflation by means of diversified basket of securities ► Significantly lower volatility (between 10-12%) compared to mining stocks (about 50%) and silver (about 35%) ► UCITS IV Funds Sources: Societe Generale, -
Types, Causes and Effects 1. Meaning of Inflation
Inflation: Types, Causes and Effects Inflation and unemployment are the two most talked-about words in the contemporary society. These two are the big problems that plague all the economies. Almost everyone is sure that he knows what inflation exactly is, but it remains a source of great deal of confusion because it is difficult to define it unambiguously. 1. Meaning of Inflation: Inflation is often defined in terms of its supposed causes. Inflation exists when money supply exceeds available goods and services. Or inflation is attributed to budget deficit financing. A deficit budget may be financed by the additional money creation. But the situation of monetary expansion or budget deficit may not cause price level to rise. Hence the difficulty of defining ‘inflation’. Inflation may be defined as ‘a sustained upward trend in the general level of prices’ and not the price of only one or two goods. G. Ackley defined inflation as ‘a persistent and appreciable rise in the general level or average of prices’. In other words, inflation is a state of rising prices, but not high prices. It is not high prices but rising price level that constitute inflation. It constitutes, thus, an overall increase in price level. It can, thus, be viewed as the devaluing of the worth of money. In other words, inflation reduces the purchasing power of money. A unit of money now buys less. Inflation can also be seen as a recurring phenomenon. While measuring inflation, we take into account a large number of goods and services used by the people of a country and then calculate average increase in the prices of those goods and services over a period of time.