Asymmetric Effects of Economic Activityon Inflation

Asymmetric Effects of Economic Activityon Inflation
Author: Mr.Douglas Laxton
Publisher: International Monetary Fund
Total Pages: 56
Release: 1994-11
Genre: Business & Economics
ISBN:

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This paper examines the evidence on asymmetries in the effects of activity on inflation. Data for the G-7 countries are found to strongly support the view that the inflation-activity relationship is nonlinear, with high levels of activity raising inflation by more than low levels decrease it. In the face of such asymmetries, the average level of output in an economy subject to demand shocks will be below the level of output at which there is no tendency for inflation to rise or fall, contrary to the implications of linear models. One implication of these results is that policymakers can raise the average level of output over time by responding promptly to demand shocks, thus reducing the variance of output around trend.

The Inflation-output Trade-off

The Inflation-output Trade-off
Author: Weshah Razzak
Publisher:
Total Pages: 36
Release: 1997
Genre: Consumer price indexes
ISBN:

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Hysteresis and Business Cycles

Hysteresis and Business Cycles
Author: Ms.Valerie Cerra
Publisher: International Monetary Fund
Total Pages: 50
Release: 2020-05-29
Genre: Business & Economics
ISBN: 1513536990

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Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.

Okun's Law, Development, and Demographics: Differences in the Cyclical Sensitivities of Unemployment Across Economy and Worker Groups

Okun's Law, Development, and Demographics: Differences in the Cyclical Sensitivities of Unemployment Across Economy and Worker Groups
Author: Zidong An
Publisher: International Monetary Fund
Total Pages: 22
Release: 2021-11-12
Genre: Business & Economics
ISBN: 1616356049

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The negative and stable relationship between an economy’s aggregate demand conditions and overall unemployment is well-documented. We show that there is a large degree of heterogeneity in the cyclical sensitivities of unemployment across worker and economy groups. First, unemployment is more than twice as sensitive to aggregate demand in advanced as in emerging market and developing economies. Second, youth’s unemployment is twice as sensitive as that of adults’. Third, women’s unemployment is significantly less sensitive to demand than men’s in advanced economies. These findings point to the highly unequal impacts of the business cycle across worker and economy groups.

Looking Into the Black Box

Looking Into the Black Box
Author: Barbara Petrongolo
Publisher:
Total Pages: 0
Release: 2000
Genre:
ISBN:

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Technology Shocks and Aggregate Fluctuations

Technology Shocks and Aggregate Fluctuations
Author: Mr.Pau Rabanal
Publisher: International Monetary Fund
Total Pages: 68
Release: 2004-12-01
Genre: Business & Economics
ISBN: 1451875657

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Our answer: Not so well. We reached that conclusion after reviewing recent research on the role of technology as a source of economic fluctuations. The bulk of the evidence suggests a limited role for aggregate technology shocks, pointing instead to demand factors as the main force behind the strong positive comovement between output and labor input measures.

European Unemployment

European Unemployment
Author: Claude Giorno
Publisher:
Total Pages: 48
Release: 1997
Genre: Europe
ISBN:

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A History of Macroeconomics from Keynes to Lucas and Beyond

A History of Macroeconomics from Keynes to Lucas and Beyond
Author: Michel De Vroey
Publisher: Cambridge University Press
Total Pages: 451
Release: 2016-01-08
Genre: Business & Economics
ISBN: 0521898439

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This book retraces the history of macroeconomics from Keynes's General Theory to the present. Central to it is the contrast between a Keynesian era and a Lucasian - or dynamic stochastic general equilibrium (DSGE) - era, each ruled by distinct methodological standards. In the Keynesian era, the book studies the following theories: Keynesian macroeconomics, monetarism, disequilibrium macro (Patinkin, Leijongufvud, and Clower) non-Walrasian equilibrium models, and first-generation new Keynesian models. Three stages are identified in the DSGE era: new classical macro (Lucas), RBC modelling, and second-generation new Keynesian modeling. The book also examines a few selected works aimed at presenting alternatives to Lucasian macro. While not eschewing analytical content, Michel De Vroey focuses on substantive assessments, and the models studied are presented in a pedagogical and vivid yet critical way.

Asymmetric Information, Corporate Finance, and Investment

Asymmetric Information, Corporate Finance, and Investment
Author: R. Glenn Hubbard
Publisher: University of Chicago Press
Total Pages: 354
Release: 2009-05-15
Genre: Business & Economics
ISBN: 0226355942

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In this volume, specialists from traditionally separate areas in economics and finance investigate issues at the conjunction of their fields. They argue that financial decisions of the firm can affect real economic activity—and this is true for enough firms and consumers to have significant aggregate economic effects. They demonstrate that important differences—asymmetries—in access to information between "borrowers" and "lenders" ("insiders" and "outsiders") in financial transactions affect investment decisions of firms and the organization of financial markets. The original research emphasizes the role of information problems in explaining empirically important links between internal finance and investment, as well as their role in accounting for observed variations in mechanisms for corporate control.