1,721,152 research outputs found
Measuring short-run inflation for central bankers
Full text linkInflation (Finance) ; Monetary policy ; Banks and banking, Central
The New Economy and the Challenges for Macroeconomic Policy
Full text linkThe accelerated introduction of information and communications technology into the economy has created numerous challenges for policymakers. This paper describes this New Economy and then proceeds to examine difficulties created for policymakers. The increased flexibility of the new economy argues against trying to use fiscal policy for stabilization and creates both immediate and long-term difficulties for monetary policy. Immediate difficulties concern the problems associated with estimating potential output when the productivity trend is shifting. During periods of transition, it is extremely difficult to distinguish permanent from transitory shifts in output growth, and adjust policy correctly. In the long-term, central banks must face the prospect of a significant decline in the demand for their liabilities, and a resulting loss of their primary interest rate policy instrument. The disappearance of the demand for central bank money for interbank settlement seems very unlikely, and so this concern seems unwarranted.
The Brave New World of Central Banking: The Policy Challenges Posed by Asset Price Booms and Busts
Full text linkAt the dawn of the 21st century, property and equity ownership are spread more broadly across the population than they once were. One consequence of this is that asset price booms and crashes now have a direct impact on general welfare. The fact that bubbles distort nearly all economic decisions gives policymakers a stronger interest in asset price stability. In this essay I examine the theoretical and empirical case for the existence of equity and property bubbles, and then summarize the economic distortions that they create. The evidence suggests increasing our attention on property prices. I go on to discuss the possible policy responses, including examining the consequences of changing the way in which housing is included in standard aggregate price measures.. Central bank policy, equity price bubbles, housing price bubbles.
The seasonality of consumer prices
Full text linkA reevaluation of the evidence of seasonality in prices, finding that seasonal price movements have become more prominent in the relatively stable inflation environment that has prevailed since 1982, and that the amount of seasonality differs greatly by item, making it difficult to generalize about seasonal price movements.Consumer price indexes ; Seasonal variations (Economics)
The unreliability of inflation indicators
Full text linkAnalysts seeking evidence of rising inflation often focus on the movements of a single indicator_an increase in the price of gold, for example, or a decline in the unemployment rate. But simple statistical tests reveal that such indicators, used in isolation, have very limited predictive power.Inflation (Finance) ; Economic indicators ; Forecasting
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