M any economists believe that price stability is the primary goal of monetary policy because it is thought to foster maximum sustainable economic growth. Price stability is often said to exist when changes in the general price level cease to be a factor in the decision processes of businesses and individuals. By this definition, price stability was not literally achieved in 1998, as many measur...

I establish that inflation risk is priced in the cross section of stock returns: Stocks that have low returns during inflationary times command a risk premium. I estimate a market price of inflation risk that is comparable in magnitude to the price of risk for the aggregate market. Inflation is therefore a key determinant of risk in the cross section of stocks. The inflation premium cannot be e...

Economists have not been altogether successful in their efforts to forecast “core” inflation—an inflation measure that typically excludes volatile food and energy prices. One possible explanation is that the models used to make these forecasts fail to distinguish the forces influencing price changes in core services from those affecting price changes in core goods. While core services inflation...

This paper re-examines evidence relating mean inflation to cross-sectional inflation asymmetry, and investigates longitudinal asymmetry in disaggregated price series. The asymmetry test used possesses two important characteristics: it has high power, and it is not dominated by outliers. In contrast to Bryan and Cecchetti (1996), the results here suggest that there does exist significant positiv...

Standard macroeconomic forecasting indicators and techniques tend to perform poorly in predicting inflation in the short-run. The present paper shows that microeconomic price data placed in an empirical model rooted in (S,s) pricing theory convey extra information on inflation dynamics. The empirical model designed to capture the deviation between target and actual price, potentially applicable...

This paper derives a concept of aggregate real income for a competitive economy in general equilibrium consisting of heterogeneous infinitely-lived people and relates it to current and future consumption possibilities. An important characteristic of our measure of income, which we call Real Income, is that deflation is carried out using a consumption deflator rather than any price index of outp...

Is Inflation Dead? I n the past few years the United States has enjoyed the unique economic duet of very low unemployment and declining price inflation. For decades, we have come to associate tight labor markets with accelerating wages and prices. But in 1997, the unemployment rate sank below 5 percent and neither wage nor price inflation became a problem. Have our inflation processes fundament...

Using a sample of monthly observations of both a 12-category group and a 203-category group of personal consumption expenditures, we furnish evidence that relative price variability is positively related to both the inflation rate and inflation variability. The relation is robust to oil-price shocks.  2000 Elsevier Science S.A. All rights reserved.

The international trade consists of two components, volume and price. price component is a deflator for trade. Meanwhile, the can be regarded as real condition In this paper, author tries to explain relationship between export import volumes according theoretical basis. response variable quantity (volume) imports exports. control variables, such GDP REER, are in accordance with "imperfect subst...

A remarkable feature of the economic performance of industrial countries in the postwar period is that there has been persistent inflation, in clear contrast to the XIX century and the period up to World-War I, which saw significant fluctuations in the general price level around a fairly stable mean. However, when one looks at inflation over the past thirty years, it is striking that, in contra...