For a central bank to fulfil its price stability mandate, the accurate assessment of inflation expectations is of crucial importance. Market participants gauging long-term investments have similar concerns about inflation. Traditionally, inflation expectations have been derived from models or through surveys of market participants’ opinions. In the mid to late 1990s financial markets started to...

We revisit a foundational theoretical paper in the menu cost literature, Sheshinski and Weiss (1983), one of the few to treat stochastic inflation with persistent deviations from trend. In contrast to the original finding, we find that optimal pricing in this environment entails using different (s, S) bands in high-inflation and low-inflation states of the world. The low-inflation band is stric...

Standard economic models predict that the choice of an exchange rate regime has important implications for the interdependency of national monetary policies, which is sometimes measured by the degree of inflation transmission across borders. In this paper, we examine how inflation rates in two small open economies, namely Hong Kong and Singapore, interact with that in the U.S. It is found that ...

This study aims to determine the relationship between population aged 30-34 years and inflation as measured by Gross Domestic Product (GDP) deflator. The method used in this is Granger Causality Test. impact of research can be seen from study's results, which men are very influential economy. Moreover, most workers world men. greatly influences economic growth inflation. male has more influence...

Introduction Central banks around the world have come to recognize the importance of maintaining low and stable inflation. One widely employed tool for helping to do so is known as inflation targeting, whereby a central bank sets a numeric goal for inflation. Once this target is publicly stated, the bank can be held accountable for its actions in regard to meeting, or not meeting, this target. ...

Conceptually, inflation is best understood as on-going erosion of the purchasing power of money. Consumer price inflation is generally measured as changes in the weighted average of the money prices of a basket of selected goods and services. This raises questions concerning the choice of goods and services which constitute that basket, what sort of price changes should be counted as part of th...

We study a model with repeated moral hazard where financial contracts are not fully indexed to inflation because nominal prices are observed with delay, as in Jovanovic & Ueda (1997). More constrained firms sign contracts that are less indexed to inflation, and as a result, their investment is more sensitive to nominal price shocks. We also find that the overall degree of nominal indexation inc...

A supermartingale deflator (resp. local martingale deflator) multiplicatively transforms nonnegative wealth processes into supermartingales (resp. local martingales). A supermartingale numéraire (resp. local martingale numéraire) is a wealth process whose reciprocal is a supermartingale deflator (resp. local martingale deflator). It has been established in previous works that absence of arbitra...

In Ireland the link between real disequilibrium (such as the unemployment gap) and inflation (either price or wage) is blurred by external factors, operating through traded goods price inflation. Attempts to extract information about the unobservable NAIRU from aggregate inflation measures, such as the HICP or wages inflation, are likely to be swamped by these external factors. This paper uses ...

today, the discussion of regularity monetary policy in achieving inflation and output gap stabilization is important. in this paper, we investigated the persistence of the output gap in iran economy and then by using a hybrid new keynesian model based on quarterly data for 1990:1- 2011:3. we compared three alternative instrumental rules in monetary policy for iran economy. the results indicated...