The Costs And Benefits Of Price Stability

Author : Martin Feldstein
Publisher : University of Chicago Press
Page : 374 pages
File Size : 43,5 Mb
Release : 2007-12-01
Category : Business & Economics
ISBN : 9780226241760

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The Costs and Benefits of Price Stability by Martin Feldstein Pdf

In recent years, the Federal Reserve and central banks worldwide have enjoyed remarkable success in their battle against inflation. The challenge now confronting the Fed and its counterparts is how to proceed in this newly benign economic environment: Should monetary policy seek to maintain a rate of low-level inflation or eliminate inflation altogether in an effort to attain full price stability? In a seminal article published in 1997, Martin Feldstein developed a framework for calculating the gains in economic welfare that might result from a move from a low level of inflation to full price stability. The present volume extends that analysis, focusing on the likely costs and benefits of achieving price stability not only in the United States, but in Germany, Spain, and the United Kingdom as well. The results show that even small changes in already low inflation rates can have a substantial impact on the economic performance of different countries, and that variations in national tax rules can affect the level of gain from disinflation.

Author : Martin S. Feldstein
Publisher : Unknown
Page : 55 pages
File Size : 54,9 Mb
Release : 1996
Category : Deflation (Finance)
ISBN : OCLC:257956469

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The Costs and Benefits of Going from Low Inflation to Price Stability by Martin S. Feldstein Pdf

"This paper evaluates the welfare gain from achieving price stability and compares it to the cost of the transition. In calculating the gain from price stability, the paper emphasizes the distortions caused by the interaction of inflation and capital income taxes. Because inflation exacerbates the tax distortions that would exist even with price stability, the annual deadweight loss of a two percent inflation rate is a surprisingly large one percent of GDP. Since the real gain from shifting to price stability grows in perpetuity at the rate of growth of GDP, its present value is a substantial multiple of this annual gain. Discounting the annual gains at the rate that investors require for risky equity investments (i.e., at the 5.1 percent real net-of-tax rate of return on the Standard and Poors portfolio of equities from 1970 to 1994) implies a present value gain equal to more than 35 percent of the initial level of GDP. Since the estimated cost of shifting from two percent inflation to price stability is about five percent of GDP, the gain substantially outweighs the cost of transition"--NBER website.

Author : Anonim
Publisher : Unknown
Page : 18 pages
File Size : 43,9 Mb
Release : 1996
Category : Budget deficits
ISBN : OCLC:34411530

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Financing Constraints and Corporate Investment by Anonim Pdf

Author : Christina D. Romer,David H. Romer
Publisher : University of Chicago Press
Page : 434 pages
File Size : 55,9 Mb
Release : 2007-12-01
Category : Business & Economics
ISBN : 9780226724836

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Reducing Inflation by Christina D. Romer,David H. Romer Pdf

While there is ample evidence that high inflation is harmful, little is known about how best to reduce inflation or how far it should be reduced. In this volume, sixteen distinguished economists analyze the appropriateness of low inflation as a goal for monetary policy and discuss possible strategies for reducing inflation. Section I discusses the consequences of inflation. These papers analyze inflation's impact on the tax system, labor market flexibility, equilibrium unemployment, and the public's sense of well-being. Section II considers the obstacles facing central bankers in achieving low inflation. These papers study the precision of estimates of equilibrium unemployment, the sources of the high inflation of the 1970s, and the use of non-traditional indicators in policy formation. The papers in section III consider how institutions can be designed to promote successful monetary policy, and the importance of institutions to the performance of policy in the United States, Germany, and other countries. This timely volume should be read by anyone who studies or conducts monetary policy.

Author : Jack G. Selody,Bank of Canada
Publisher : Unknown
Page : 66 pages
File Size : 49,9 Mb
Release : 1990
Category : Economic stabilization
ISBN : UCR:31210011849625

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The Goal of Price Stability by Jack G. Selody,Bank of Canada Pdf

Author : Cass R. Sunstein
Publisher : American Bar Association
Page : 220 pages
File Size : 55,5 Mb
Release : 2002
Category : Business & Economics
ISBN : 1590310543

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The Cost-benefit State by Cass R. Sunstein Pdf

This book discusses the current topic of Federal Government regulations increasingly assessed by asking whether the benefits of the regulation justifies the cost of the regulation.

Author : Mr.Etienne B. Yehoue
Publisher : International Monetary Fund
Page : 36 pages
File Size : 46,6 Mb
Release : 2012-07-01
Category : Business & Economics
ISBN : 9781475505375

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On Price Stability and Welfare by Mr.Etienne B. Yehoue Pdf

The financial crisis in the advanced countries that began in 2007 has led central bankers to adopt unconventional policy measures as policy interest rates neared the zero bound. One suggestion (Blanchard, Dell’Ariccia, and Mauro, 2010) has been to raise inflation targets to provide more room for policy rate easing during crises. This paper addresses a different issue: the relationship between inflation and welfare. The literature is surveyed and a model is developed. A key conclusion is that an increase in inflation targets gives rise to additional welfare costs, even after the extra room to maneuver above the zero lower bound for nominal policy rates is taken into account. Based on parameter values that fit U.S. data, the additional welfare costs of raising inflation targets from 2 to 4 percent are estimated at about 0.3 percent of annual real income. A rise to 10 percent would yield additional welfare costs of about 1 percent of real income. Other parameter values yield welfare costs as high as 7 (respectively 30) percent of real income for raising inflation targets from 2 to 4 (respectively from 2 to 10) percent. The full costs of raising inflation targets are likely to be higher because the model used to generate these estimates does not account for higher inflation-induced volatility.

Author : Bank of Canada
Publisher : Unknown
Page : 513 pages
File Size : 41,5 Mb
Release : 1998
Category : Inflation (Finance)
ISBN : 0660173972

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Price Stability, Inflation Targets, and Monetary Policy by Bank of Canada Pdf

Author : Asian Development Bank
Publisher : Asian Development Bank
Page : 385 pages
File Size : 52,7 Mb
Release : 2013-01-01
Category : Business & Economics
ISBN : 9789290929581

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Cost-Benefit Analysis for Development by Asian Development Bank Pdf

The Asian Development Bank (ADB) has been continuously undertaking measures to enhance the effectiveness of its operations. To improve projects both at the preparation and implementation stages, ADB issued the Guidelines for Economic Analysis of Projects in 1997 as a means to enhancing project quality at entry. The conduct of proper economic analysis helps ensure the efficient use of development funds and public resources and thereby increase aid effectiveness. This practical guide is a supplement to the Guidelines for the Economic Analysis of Projects. It provides an overview of recent methodological developments in cost-benefit analysis as well as suggested improvements in the economic analysis of projects in selected sectors through case studies. These case studies illustrate the application of suggested methodologies, taking into account sector-specific needs, as well as difficulties faced by practitioners in terms of data and time constraints during project processing. It also aims to contribute to ADB’s capacity building initiatives as this will be the main reference material for conduct of economic analysis.

Author : International Monetary Fund. External Relations Dept.
Publisher : International Monetary Fund
Page : 60 pages
File Size : 40,8 Mb
Release : 1996-01-01
Category : Business & Economics
ISBN : 9781451951899

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Finance & Development, December 1996 by International Monetary Fund. External Relations Dept. Pdf

For the latest thinking about the international financial system, monetary policy, economic development, poverty reduction, and other critical issues, subscribe to Finance & Development (F&D). This lively quarterly magazine brings you in-depth analyses of these and other subjects by the IMF’s own staff as well as by prominent international experts. Articles are written for lay readers who want to enrich their understanding of the workings of the global economy and the policies and activities of the IMF.

Author : Board of Governors of the Federal Reserve System
Publisher : Unknown
Page : 0 pages
File Size : 45,7 Mb
Release : 2002
Category : Banks and Banking
ISBN : 0894991965

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The Federal Reserve System Purposes and Functions by Board of Governors of the Federal Reserve System Pdf

Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

Author : Frederic S. Lee
Publisher : Cambridge University Press
Page : 293 pages
File Size : 47,5 Mb
Release : 1999-02-04
Category : Business & Economics
ISBN : 9781139426978

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Post Keynesian Price Theory by Frederic S. Lee Pdf

This book sets out the foundations of post-Keynesian price theory. Blending theory and analysis it is the first comprehensive assessment of post-Keynesian price theory and its foundations. Scholars and students will particularly welcome the emphasis on the non-neoclassical and non-equilibrium nature of post-Keynesian price theory.

Author : Karl-Heinz Tödter,Gerhard Ziebarth
Publisher : Unknown
Page : 69 pages
File Size : 48,7 Mb
Release : 1997
Category : Electronic
ISBN : 393200244X

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Price Stability Versus Low Inflation in Germany? by Karl-Heinz Tödter,Gerhard Ziebarth Pdf

Author : Mr.Lars E. O. Svensson
Publisher : International Monetary Fund
Page : 76 pages
File Size : 43,8 Mb
Release : 2016-01-11
Category : Business & Economics
ISBN : 9781498310734

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Cost-Benefit Analysis of Leaning Against the Wind by Mr.Lars E. O. Svensson Pdf

“Leaning against the wind” (LAW) with a higher monetary policy interest rate may have benefits in terms of lower real debt growth and associated lower probability of a financial crisis but has costs in terms of higher unemployment and lower inflation, importantly including a higher cost of a crisis when the economy is weaker. For existing empirical estimates, costs exceed benefits by a substantial margin, even if monetary policy is nonneutral and permanently affects real debt. Somewhat surprisingly, less effective macroprudential policy and generally a credit boom, with resulting higher probability, severity, or duration of a crisis, increases costs of LAW more than benefits, thus further strengthening the strong case against LAW.

Author : David M. G. Newbery,Joseph E. Stiglitz
Publisher : Oxford University Press, USA
Page : 486 pages
File Size : 41,6 Mb
Release : 1981
Category : Commodity control
ISBN : UCAL:B4912429

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The Theory of Commodity Price Stabilization by David M. G. Newbery,Joseph E. Stiglitz Pdf

Fundamentals: supply and demand under risk; Market equilibrium; Price stabilization with no supply response; Supply responses to stabilization; Microeconomic repercussions; Economic considerations.