The article presents an economic forecast which implies that inflation will affect the growth rates in Yemen. It is stated that inflation is a real risk in the economy. It is observed that the drastic change of the previous years is suggesting a clear scope for a tighter policy. Yemeni autho...
In this paper we characterize the Ramsey-optimal rate of inflation in an economy with a foreign demand for its currency. In the absence of such demand, the model implies that the Friedman rule-deflation at the real rate of interest-maximizes the utility of the representative domestic consumer....
That is, after an adverse supply shock, policymakers have to accept a higher rate of inflation for any given rate of unemployment, or a higher rate of unemployment for any given rate of inflation. When the Fed contracts growth in the money supply to reduce inflation, it moves the economy ...
The interaction between changes in the rate of inflation and tax systems can have potential terms of trade effects. An open-economy macroeconomic model is presented in which such effects are analyzed. The asset menu consists of money, corporate capital whose nominal income is subject to taxation,...
©2023AsianDevelopmentBank 6ADBAvenue,MandaluyongCity,1550MetroManila,PhilippinesTel+63286324444;Fax+63286362444 www.adb.org Somerightsreserved.Publishedin2023. ISSN2313-6537(print),2313-6545(electronic)PublicationStockNo.WPS230372-2 DOI:http://dx.doi.org/10.22617/WPS230372-2 Theviewsexpressedinthispubli...
The Error Correction Model (ECM) test is essential to see whether an economy is converging towards equilibrium in the short- run or not. According to the outcome of the study, inflation is away from its equilibrium value. For instance, the error correction term -0.49 implies that 49 percent...
…Democrats are bracing for the prospect that Trump could again inherit an economy they believe is booming due to the policies passed during their time in government. With all this glowing analysis, a reader from another planet might wonder why Biden isn’t heading to a landslide victory, even...
a central bank should take appropriate actions to stem the emergence of substantial slack in the economy and thereby reduce the risk of deflation. Second, it should clearly communicate its commitment to low positive rates of inflation. An example of such communication is the Federal Open Market Co...
Abstract. We study simple inflation-forecast targeting in an open-economy setting. Simple inflation-forecast targeting implies setting an interest rate which, if kept unchanged throughout the forecast-targeting horizon, produces a conditional inflation forecast equal to the inflation target at the end ...
Whereas high inflation rates are a signal of an overheated economy and pose many risks, most economists agree that the impact of small levels of inflation is outweighed by the risk of deflation, that is, a negative interest rate. Nonetheless, the estimated global inflation rate in 2023 was ...