Inflation Theory

SignsofInflation2012

by Gilles Bransbourg

The history of inflation through its objects, a short cut through the ANS exhbition at the FED of NY. Published by the... more The history of inflation through its objects, a short cut through the ANS exhbition at the FED of NY. Published by the ANS magazine. Illustrated by some of the exhibited objects.

Imbalances causing the financial and debt crisis

by Wilfred Berendsen

Food prices, government subsidies and fiscal balances in south Mediterranean countries

by Marga Peeters

co-authored with Ronald Albers

Soaring food and energy prices sparked the revolts in Northern African countries at the end of 2010. Despite... more Soaring food and energy prices sparked the revolts in Northern African countries at the end of 2010. Despite government subsidies, consumer price inflation rose, which reduced consumers’ purchasing power. This article empirically investigates the impact of world food prices on inflation and government subsidies for Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the occupied Palestinian territories and Tunisia during the ten-year period 2002-2011. Our findings
show an asymmetry in the response of consumer price inflation to world food price shocks, in that soaring world food prices made inflation rise fast while nominal rigidities prevented
inflation from falling. Moreover, this paper shows that government balances deteriorated up to 2% of GDP in 2008 and 2011 due to the incremental government food subsidies while they
hardly improved in value terms when world food prices sharply fell in 2009.

Soaring food and fuel prices: Their impact on public finances and other causes of persistently high consumer price inflation in North African and Middle Eastern countries

by Marga Peeters

co-authored with Ronald Albers

World food prices are now even higher than their peak just before the global crisis. During periods of high commodity... more World food prices are now even higher than their peak just before the global crisis. During periods of high commodity prices, North African and Middle Eastern governments have a long tradition of subsidising food and fuel products. But this column shows that food price inflation and consequently subsidies were also high during periods when global commodity prices were falling. Now these countries have an opportunity to correct this.

Measuring monetary conditions in Europe: Use and limitations of the monetary conditions index

by Marga Peeters

The Monetary Conditions Index is a composite index of interest and exchange rates frequently used by central banks,... more The Monetary Conditions Index is a composite index of interest and exchange rates frequently used by central banks, the IMF, and the OECD. This paper considers the benefits and weaknesses of the MCI in the light of large macroeconometric models. It follows that the impact of the exchange rate on GDP relative to the impact of the short-term interest rate is substantially lower under a monetary union. For most countries, including a long-term interest rate in the MCI only affects the level of the MCI and not its turning points.

Achieving price stability in the euro zone: Monetary or inflation targeting?

by Marga Peeters

In this paper a small econometric model with model-consistent expectations is adopted for the euro zone to study... more In this paper a small econometric model with model-consistent expectations is adopted for the euro zone to study monetary and inflation targeting. Similation results show that the ’costs’ in terms of inflation and economic growth volatility are by and large lowest in case of inflation targeting. Some attention is finally drawn to asymmetric shocks.

Inflation and Civilization: Man’s Fate and His Money

by Lewis E. Lehrman

Published on Wednesday, October 05, 1977 - New Times

Of the many civilized institutions which originated over four millennia ago, the economic institution of money was a... more Of the many civilized institutions which originated over four millennia ago, the economic institution of money was a social and political innovation as significant as the development of the city itself.

Fiat Money, Fiat Inflation

by Lewis E. Lehrman

Published on Wednesday, March 16, 2011 - The Weekly Standard

Since the beginning of 2009, oil prices have almost tripled, gasoline prices are up about 50 percent, and basic food... more Since the beginning of 2009, oil prices have almost tripled, gasoline prices are up about 50 percent, and basic food prices, such as corn, soybeans, and wheat, have almost doubled around the world. Cotton and copper prices have reached all time highs; major rises in sugar, spice, and wheat prices have been creating food riots in poor countries, where basic goods inflation is rampant.

The Australian Phillips curve and more

by Oleg Kitov

Unemployment and Inflation in Western Europe: Solution by the Boundary Integral Method

by Oleg Kitov

A crucial hypothesis for Inflation

by Giandomenico Palumbo

Sectoral Labor Markets, the Long-Run Phillips Curve, and Implicit Contracts

by Jonathan Ratner

Estimating The Inflation-Growth Nexus - A Smooth Transition Model

by Raphael Espinoza

Forthcoming in the World Bank Economic Review. An earlier version is available here http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1578674 issued as IMF Working Paper No. 10/76, co-authored with H. Leon and A. Prasad (both IMF)

Motivated by the global inflation episode of 2007-08 and concern that high levels of inflation could undermine growth,... more Motivated by the global inflation episode of 2007-08 and concern that high levels of inflation could undermine growth, this paper uses a panel of 165 countries and data for 1960-2007 to revisit the nexus between inflation and growth. We use a smooth transition model to investigate the speed at which inflation beyond a threshold becomes harmful to growth, an important consideration in the policy response to rising inflation as the world economy recovers. We estimate that for all country groups (except for advanced countries) inflation above a threshold of about 10 percent quickly becomes harmful to growth, suggesting the need for a prompt policy response to inflation at or above the relevant threshold. For the advanced economies, the threshold is much lower. For oil exporting countries, the estimates are less robust, possibly reflecting heterogeneity among oil producers, but the effect of higher inflation for oil producers is found to be stronger.