Inflation Expectations And The Supply Chain
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| Author | : Elías Albagli |
| Publisher | : International Monetary Fund |
| Total Pages | : 42 |
| Release | : 2022-08-12 |
| Genre | : Business & Economics |
| ISBN | : |
We show that firms rely on price changes observed along their supply chain to form expectations about aggregate inflation, and that these expectations have a complete pass-through to sales prices. Leveraging a unique dataset on Chilean firms merging expectation surveys and records from the VAT and customs registries, we document that changes in prices at which firms purchase inputs inform their forecasts of the economy’s inflation. This is the case even if changes in input costs do not determine the inflation outcome. These findings reject the full-information rational-expectations hypothesis and are consistent with firms’ disagreement about future inflation and inattention to macroeconomic news, which we document for Chile. Our results from a firm-level Phillips’ curve estimation suggest that firms’ beliefs about inflation are a key determinant for their price-setting decisions. Therefore, we argue that the channel we highlight in this paper has the potential to lead to dispersion in inflation expectations, price dispersion, and weaken the expectation channel of policies.
| Author | : Peter J. N. Sinclair |
| Publisher | : Routledge |
| Total Pages | : 402 |
| Release | : 2009-12-16 |
| Genre | : Business & Economics |
| ISBN | : 1135179778 |
Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring that firms and workers expect it to be low. So expectations of inflation are a key influence on national economic welfare. This collection pulls together a galaxy of world experts (including Roy Batchelor, Richard Curtin and Staffan Linden) on inflation expectations to debate different aspects of the issues involved. The main focus of the volume is on likely inflation developments. A number of factors have led practitioners and academic observers of monetary policy to place increasing emphasis recently on inflation expectations. One is the spread of inflation targeting, invented in New Zealand over 15 years ago, but now encompassing many important economies including Brazil, Canada, Israel and Great Britain. Even more significantly, the European Central Bank, the Bank of Japan and the United States Federal Bank are the leading members of another group of monetary institutions all considering or implementing moves in the same direction. A second is the large reduction in actual inflation that has been observed in most countries over the past decade or so. These considerations underscore the critical – and largely underrecognized - importance of inflation expectations. They emphasize the importance of the issues, and the great need for a volume that offers a clear, systematic treatment of them. This book, under the steely editorship of Peter Sinclair, should prove very important for policy makers and monetary economists alike.
| Author | : Mark Gertler |
| Publisher | : MIT Press |
| Total Pages | : 436 |
| Release | : 2004 |
| Genre | : Business & Economics |
| ISBN | : 9780262572217 |
The NBER Macroeconomics Annual presents pioneering work in macroeconomics by leading academic researchers to an audience of public policymakers and the academic community. Each commissioned paper is followed by comments and discussion. This year's edition provides a mix of cutting-edge research and policy analysis on such topics as productivity and information technology, the increase in wealth inequality, behavioral economics, and inflation.
| Author | : Mr. Kangni R Kpodar |
| Publisher | : International Monetary Fund |
| Total Pages | : 34 |
| Release | : 2021-11-12 |
| Genre | : Business & Economics |
| ISBN | : 1616356154 |
This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.
| Author | : Michael D. Bordo |
| Publisher | : University of Chicago Press |
| Total Pages | : 545 |
| Release | : 2013-06-28 |
| Genre | : Business & Economics |
| ISBN | : 0226066959 |
Controlling inflation is among the most important objectives of economic policy. By maintaining price stability, policy makers are able to reduce uncertainty, improve price-monitoring mechanisms, and facilitate more efficient planning and allocation of resources, thereby raising productivity. This volume focuses on understanding the causes of the Great Inflation of the 1970s and ’80s, which saw rising inflation in many nations, and which propelled interest rates across the developing world into the double digits. In the decades since, the immediate cause of the period’s rise in inflation has been the subject of considerable debate. Among the areas of contention are the role of monetary policy in driving inflation and the implications this had both for policy design and for evaluating the performance of those who set the policy. Here, contributors map monetary policy from the 1960s to the present, shedding light on the ways in which the lessons of the Great Inflation were absorbed and applied to today’s global and increasingly complex economic environment.
| Author | : Edward Alden |
| Publisher | : Rowman & Littlefield |
| Total Pages | : 269 |
| Release | : 2017-09-15 |
| Genre | : Political Science |
| ISBN | : 1538109093 |
*Updated edition with a new foreword on the Trump administration's trade policy* The vast benefits promised by the supporters of globalization, and by their own government, have never materialized for many Americans. In Failure to Adjust Edward Alden provides a compelling history of the last four decades of US economic and trade policies that have left too many Americans unable to adapt to or compete in the current global marketplace. He tells the story of what went wrong and how to correct the course. Originally published on the eve of the 2016 presidential election, Alden’s book captured the zeitgeist that would propel Donald J. Trump to the presidency. In a new introduction to the paperback edition, Alden addresses the economic challenges now facing the Trump administration, and warns that economic disruption will continue to be among the most pressing issues facing the United States. If the failure to adjust continues, Alden predicts, the political disruptions of the future will be larger still.
| Author | : |
| Publisher | : |
| Total Pages | : 196 |
| Release | : 2008 |
| Genre | : Budget |
| ISBN | : |
| Author | : Jongrim Ha |
| Publisher | : World Bank Publications |
| Total Pages | : 524 |
| Release | : 2019-02-24 |
| Genre | : Business & Economics |
| ISBN | : 1464813760 |
This is the first comprehensive study in the context of EMDEs that covers, in one consistent framework, the evolution and global and domestic drivers of inflation, the role of expectations, exchange rate pass-through and policy implications. In addition, the report analyzes inflation and monetary policy related challenges in LICs. The report documents three major findings: In First, EMDE disinflation over the past four decades was to a significant degree a result of favorable external developments, pointing to the risk of rising EMDE inflation if global inflation were to increase. In particular, the decline in EMDE inflation has been supported by broad-based global disinflation amid rapid international trade and financial integration and the disruption caused by the global financial crisis. While domestic factors continue to be the main drivers of short-term movements in EMDE inflation, the role of global factors has risen by one-half between the 1970s and the 2000s. On average, global shocks, especially oil price swings and global demand shocks have accounted for more than one-quarter of domestic inflation variatio--and more in countries with stronger global linkages and greater reliance on commodity imports. In LICs, global food and energy price shocks accounted for another 12 percent of core inflation variatio--half more than in advanced economies and one-fifth more than in non-LIC EMDEs. Second, inflation expectations continue to be less well-anchored in EMDEs than in advanced economies, although a move to inflation targeting and better fiscal frameworks has helped strengthen monetary policy credibility. Lower monetary policy credibility and exchange rate flexibility have also been associated with higher pass-through of exchange rate shocks into domestic inflation in the event of global shocks, which have accounted for half of EMDE exchange rate variation. Third, in part because of poorly anchored inflation expectations, the transmission of global commodity price shocks to domestic LIC inflation (combined with unintended consequences of other government policies) can have material implications for poverty: the global food price spikes in 2010-11 tipped roughly 8 million people into poverty.
| Author | : Akkucuk, Ulas |
| Publisher | : IGI Global |
| Total Pages | : 378 |
| Release | : 2022-08-15 |
| Genre | : Business & Economics |
| ISBN | : 1668458780 |
As the COVID-19 pandemic comes to a close, inflation has revealed itself to be a major problem for all countries of the developed world. The problem has been exacerbated in developing nations, which had problems even before the pandemic. Energy prices have increased, and with the increase in transportation costs, it has been more difficult for many retailers to stock shelves as they did before the pandemic. It is understood by many that the rising prices and supply chain disruptions will likely not be temporary and must be managed by future executives. Managing Inflation and Supply Chain Disruptions in the Global Economy uncovers the many ways businesses can manage this new phenomenon. It discusses global crises and their effects on the global economy in terms of inflation and supply chain. Covering topics such as inflationist impact, crisis leadership, and deglobalization, this premier reference source is an essential resource for economists, supply chain specialists, government officials, consultants, business leaders and executives, logistics professionals, IT managers, students and educators of higher education, researchers, and academicians.
| Author | : Zo Andriantomanga |
| Publisher | : International Monetary Fund |
| Total Pages | : 41 |
| Release | : 2023-02-24 |
| Genre | : Business & Economics |
| ISBN | : |
The Covid-19 pandemic has led to a large disruption of global supply chains. This paper studies the implications of supply chain disruptions for inflation and monetary policy in sub-Saharan Africa. Increases in supply chain pressures have had a sizeable impact on headline, food, and tradable inflation for a panel of 29 sub-Saharan African countries from 2000 to 2022. Our findings suggest that central banks can stabilize inflation and output more efficiently by monitoring global supply chains and adjusting the monetary policy stance before the disruptions have fully passed through into all inflation components. The gains from monitoring supply chain disruptions are particularly large for open economies which tend to experience outsized second-round effects on the prices of non-tradable goods and services.
