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Full-Text Articles in Social and Behavioral Sciences

Profit Shares And Cost-Push Inflation: Examining The Distributional Nature Of U.S. Inflation And The Effectiveness Of Monetary Policy, Devin Herbinger May 2024

Profit Shares And Cost-Push Inflation: Examining The Distributional Nature Of U.S. Inflation And The Effectiveness Of Monetary Policy, Devin Herbinger

Economics Student Theses and Capstone Projects

The sharp increase in post-pandemic inflation coincided with a profit explosion characterized by a growing share of profit in output. This paper argues that the record profit share in the nonfinancial corporate sector entails a redistribution of income against real wages due to the current institutional and structural conditions of the U.S. economy. Using profit share as a proxy for markups, the results of this paper highlight the macroeconomic implications of excessive profitability in the face of a global exogenous shock. Chiefly, rising profit share correlates with accelerating CPI inflation from 2021-22. Moreover, this surge in profit share occurred when …

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Economic Anomalies Following The Handover Of Hong Kong, Nathan Martin May 2024

Economic Anomalies Following The Handover Of Hong Kong, Nathan Martin

Economics Undergraduate Honors Theses

This paper seeks to examine and provide a possible explanation for economic anomalies in Hong Kong following its handover to China. Hong Kong was on a 99-year lease to the United Kingdom from China before being handed back over July 1st, 1997. Due to the “one country, two systems” policy espoused in the handover agreement that was to be implemented for fifty years, this event marks a rare natural experiment of a peaceful regime change without a significant change in governance. This paper seeks to understand the impact of the act of regime change on selected key macroeconomic …

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Analyzing The Impact Of Covid-19 Driven Inflation On Customer Personal Consumption In The Us, Yinwei Li May 2024

Analyzing The Impact Of Covid-19 Driven Inflation On Customer Personal Consumption In The Us, Yinwei Li

Economics Student Theses and Capstone Projects

This paper focuses on the different effects of COVID-19-driven inflation on U.S. consumer spending on food, durable goods, and nondurable goods. The study used regression models to analyze changes in personal consumption spending on three categories between 2010-2017 and 2018-2024. The article emphasized that the economic instability caused by the pandemic and the fiscal policies utilized by the government have contributed to consumer behavior to a certain extent. The survey results show that the impact of inflation on food and non-durable goods spending is very clear: consumption on non-durable goods and food has increased. This may be due to increased …

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Partisan Perspectives On Inflation: Exploring Bias In Economic Expectations, Anna Durall Apr 2024

Partisan Perspectives On Inflation: Exploring Bias In Economic Expectations, Anna Durall

Economics Honors Projects

Inflation expectations are important determinants of future inflation and individual consumer behavior. Recent attention has been devoted to individual-level heterogeneity in inflation expectations. I consider political partisanship as a source of heterogeneity and question whether expectations are biased by partisanship. I find that they are, i.e., that individuals from the president's political party expect lower inflation relative to members of the opposing party (this difference is statistically insignificant during the Bush presidency), and that this result cannot be explained by additional sources of heterogeneity. I also examine whether belonging to the president's political party affects the rationality of expectations and …

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Is Inflation Caused By Conflict?, Nicolas Cachanosky, Emilio Ocampo Jan 2024

Is Inflation Caused By Conflict?, Nicolas Cachanosky, Emilio Ocampo

Hunt Institute Working Paper Series

We offer a critique of a paper recently published Lorenzoni and Werning (2023) that seeks to make an original contribution to the hypothesis that inflation is primarily caused by conflict and reconcile the Post-Keynesian and New-Keynesian traditions. L&W’s paper has two sections. In the first they develop a barter model that allows them to prove that inflation can occur with conflict and without money. In the second section they incorporate the conflict hypothesis into a broader framework compatible with New Keynesian models. We question the logical consistency and empirical validity of the barter model and the testability of the model …

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Intersectoral Conflict And Delays In Macroeconomic Stabilization, Arslan Razmi Jan 2024

Intersectoral Conflict And Delays In Macroeconomic Stabilization, Arslan Razmi

Economics Department Working Paper Series

An important body of literature explores the political economy reasons
underlying delays in macroeconomic stabilization. This paper develops
a framework to analyze conflict between two groups of economic actors,
one that has an endowment of internationally tradable goods and another
that is endowed with non-tradable goods. The focus is on the exchange
rate policy in a developing country set-up where the government employs
seigniorage revenue to finance spending pre-stabilization, and faces fiscal
and balance of payments problems that necessitate stabilization with a step
devaluation. The presence of exchange rate and endowment uncertainty,
the role of forward-looking expectations, and the possibility …

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Do Price Controlled Basic Food Items Affect Inflation In Fiji?, Joel Abraham, Akeneta Vonoyauyau, Seema W. Narayan Prof. Nov 2023

Do Price Controlled Basic Food Items Affect Inflation In Fiji?, Joel Abraham, Akeneta Vonoyauyau, Seema W. Narayan Prof.

Bulletin of Monetary Economics and Banking

This note examines the effects of price-controlled perishable food items on inflation in Fiji. We study year-on-year changes in headline inflation and disaggregate measures of inflation in the form of food and non-alcoholic beverages and vegetables against three perishable food items used daily by Fijian households, namely, potatoes, onion, and garlic over the period 2019:01-2022:08. We also follow Narayan et al (2023), allowing for the lags and leads framework in examining Fiji’s inflation. Our results show that the leads and lags model explain 22%, 27% and 65% of headline, food and non-alcoholic beverages and vegetables inflation rates, respectively, over the …

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Inflation, Monetary Policy, And The Sacrifice Ratio, Leef H. Dierks Nov 2023

Inflation, Monetary Policy, And The Sacrifice Ratio, Leef H. Dierks

CBER Conference

Motivated by the 2022 uptick in headline inflation and the marked shift towards globally more restrictive monetary policies, this paper examines the sacrifice ratio, i.e., the percentage cost of actual production lost to every one percentage point decrease in (trend) inflation, for selected Southeast Asian economies. Results indicate that upon adopting a contractive monetary policy, GDP growth dropped by up to 0.5 per cent, confirming that monetary authorities’ disinflationary policies typically trigger declines in both output and employment. However, as even minor adjustments to the way of determining the sacrifice ratio lead to varying results, caution ought to be applied …

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Monetary Policy And Stagflation: A Trade-Off Between Price Stability And Economic Growth?, Leef H. Dierks Jul 2023

Monetary Policy And Stagflation: A Trade-Off Between Price Stability And Economic Growth?, Leef H. Dierks

Journal of New Finance

Several euro area economies are likely to experience a stagflation in 2023. This situation is characterized by a combination of economic stagnation, i.e., GDP growth falling below its potential growth rate, and a pronounced increase in inflation as was last observed during the 1970s’ oil crisis. A stagflation presents the European Central Bank with a dilemma. Should it further tighten its monetary policy in an attempt to align euro area inflation (expectations) with its target of two per cent p.a. in the medium term? Or should the ECB re-adopt a more accommodative stance so as to stimulate economic growth in …

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Reflections On Inflation: How Bad Has It Been?, Jesus Felipe Jul 2023

Reflections On Inflation: How Bad Has It Been?, Jesus Felipe

Angelo King Institute for Economic and Business Studies (AKI)

THE increase in prices that countries have experienced since March 2022 has brought old fears about the deleterious impact of inflation. It is true that prices increased after the Russian invasion of Ukraine and this affected a series of commodities that are imported. Yet, it is important to understand how much prices have increased, the nature of inflation we have experienced, and the reaction of central banks.

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Revisiting The Exchange Rate Pass- Through To Domestic Prices In Egypt, Ahmed Abdelhamid Jul 2023

Revisiting The Exchange Rate Pass- Through To Domestic Prices In Egypt, Ahmed Abdelhamid

Theses and Dissertations

Exchange rate pass-through (ERPT) refers to the extent to which the movements in the exchange rate influence domestic prices. This study revisits the exchange rate pass-through in Egypt using quarter data from 2006 to 2022. The study employs a Structural Vector Autoregression (SVAR) model to estimate the degree of ERPT. The findings suggest that ERPT in Egypt is incomplete, meaning that changes in the exchange rate do not fully pass through to consumer prices. The study also investigates the role of the money supply in absorbing the shocks in the nominal exchange rate. The study has important implications for policymakers …

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The Macrodynamics Of Indian Rupee Swap Yields, Tanweer Akram, Khawaja Mamun Jun 2023

The Macrodynamics Of Indian Rupee Swap Yields, Tanweer Akram, Khawaja Mamun

WCBT Working Papers

This paper econometrically models the dynamics of Indian rupee (INR) swap yields based on key macroeconomic factors using the autoregressive distributive lag (ARDL) approach. It examines whether the short-term interest rate has a decisive influence on long-term INR swap yields after controlling for other factors, such as core inflation, the growth of industrial production, the logarithm of the equity price index, and the logarithm of the INR exchange rate. The estimated models show that the short-term interest rate has an important influence on the swap yields. This implies that the Reserve Bank of India (RBI) can sway borrowing and lending …

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Survey Of Professional Forecasters 2023, Singapore Management University May 2023

Survey Of Professional Forecasters 2023, Singapore Management University

Sim Kee Boon Institute for Financial Economics

Forecasters Maintain Their Expectations for Growth in 2023 The forecasters see the U.S. economy in 2023 expanding at the same pace as they predicted three months ago, according to 38 panelists surveyed by the Federal Reserve Bank of Philadelphia. The forecasters predict annual-average over annualaverage growth in real GDP of 1.3 percent in 2023, unrevised from their estimate of three months ago. The panelists are also maintaining their forecast for growth in the second quarter at an annual rate of 1.0 percent, unchanged compared with their previous projection. However, while their predictions for the second quarter and for 2023 remain …

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An Inquiry Concerning Japanese Yen Interest Rate Swap Yields, Tanweer Akram, Khawaja Mamun May 2023

An Inquiry Concerning Japanese Yen Interest Rate Swap Yields, Tanweer Akram, Khawaja Mamun

WCBT Working Papers

This paper econometrically models Japanese yen (JPY)–denominated interest rate swap yields. It examines whether the short-term interest rate exerts an influence on the long-term JPY swap yield after controlling for several key macroeconomic variables, such as core inflation, the growth of industrial production, the percentage change in the equity price index, and the percentage change in the exchange rate. It also tests whether there are structural breaks in the dynamics of Japanese swap yields and related variables. The estimated econometric models show that the short-term interest rate exerts an important influence on the long-term swap yield in some periods but …

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How Do Economic Conditions Affect How The Environment Is Treated, Hogan Thomas Apr 2023

How Do Economic Conditions Affect How The Environment Is Treated, Hogan Thomas

Honors Projects

This paper focuses on how economic conditions affect how the environment is treated. It creates a correlation between the ease of doing business ranking, human freedom index, economic freedom index, Real GDP growth, inflation, and environmental ranking to see how they impact each other. It also looks into historical changes in environmentalism and finds how the changes correlated with changes in economic conditions.

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Three Essays On Macroeconomics And Development, Guilherme Klein Martins Apr 2023

Three Essays On Macroeconomics And Development, Guilherme Klein Martins

Doctoral Dissertations

This dissertation is a collection of essays that relate, in different forms, macroeconomic policies to economic development. Essay 1 provides evidence that austerity shocks have longrun negative effects on GDP. Besides addressing the important gap in the growing fiscal research regarding the short time horizon of the estimations, the paper analyzes two other important assumptions made in the literature regarding the (i) symmetry of episodes of fiscal expansion and contraction and (ii) uniformity of fiscal multipliers for different sizes of shocks. We use narrative fiscal shocks and propensity score reweighting in a local projections setup to account for the potential …

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The American Dream: Living Paycheck To Paycheck, Benjamin Henwood Apr 2023

The American Dream: Living Paycheck To Paycheck, Benjamin Henwood

Richard T. Schellhase Essay Prize in Ethics

A debate that has gained traction due to recent economic circumstances is how the United States government should raise the federal minimum wage, and if they should raise it at all. I propose the United States government should raise the federal minimum wage by implementing a living wage or tying the federal minimum wage to inflation. Implementing a living wage would benefit workers as it would cover the cost of living in their geographic area. It would also benefit employers as their employees would be getting paid according to their needs rather than being paid a blanket wage that may …

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An Econometric Model Of The Us Government Yield Curve Levels And Dynamics, Katerina Yiasoumi Jan 2023

An Econometric Model Of The Us Government Yield Curve Levels And Dynamics, Katerina Yiasoumi

Theses and Dissertations

The yield curve is the graph of the relationship of the nominal yield to maturity (ytm) on bonds of a similar asset class to different bond maturities at a point in time. Yield curves exist for every sector of the fixed income asset class, e.g., corporate, municipal, emerging markets, high yield, etc. not only for the United States, but for all bond markets worldwide. This research uses graphical techniques, descriptive statistics, correlation, as well as linear and non-linear regression to model each of nine treasury bills, notes, and bond ytms along the US Government bond maturity spectrum. The result is …

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Part 5: Virginia's Hotel Industry Grows, But Change Is Coming, Dragas Center For Economic Analysis And Policy, Old Dominion University Jan 2023

Part 5: Virginia's Hotel Industry Grows, But Change Is Coming, Dragas Center For Economic Analysis And Policy, Old Dominion University

State of the Commonwealth Reports

This chapter assesses the performance of the hotel industry in the Commonwealth and discusses the challenges facing the hotel industry in 2024 and beyond. To understand the prospects for growth, we examine the recovery from the shock of 2020 and how different areas of the commonwealth fared with regard to hotel revenue and occupancy. We take stock of the competitive environment and how labor shortages continue to challenge hoteliers. We ask: what does the future hold for the hotel industry in Virginia?

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Part 1: Virginia's Economy Grows, But Questions Linger About The Future, Dragas Center For Economic Analysis And Policy, Old Dominion University Jan 2023

Part 1: Virginia's Economy Grows, But Questions Linger About The Future, Dragas Center For Economic Analysis And Policy, Old Dominion University

State of the Commonwealth Reports

There is good news to report about the economy of the Commonwealth. Economic activity increased in 2022 and 2023. A record number of Virginians were at work or looking for work. Labor force participation increased above pre-pandemic levels. However, this news is tempered by the fact that Virginia grew slower than the nation and Virginians continue to migrate out of the Commonwealth. The Virginia economy should grow in 2024, but work remains to be done to match the economic performance of our peers.

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Chinese Yuan Interest Rate Swap Yields, Tanweer Akram, Khawaja Mamun Jan 2023

Chinese Yuan Interest Rate Swap Yields, Tanweer Akram, Khawaja Mamun

WCBT Faculty Publications

This paper models the dynamics of Chinese yuan–denominated long-term interest rate swap yields. It shows that the short-term interest rate exerts a decisive influence on the long-term swap yield after controlling for various macrofinancial variables, such as core inflation, the growth of industrial production, the percent change in the equity price index, and the percentage change in the Chinese yuan exchange rate. The autoregressive distributed lag approach is applied to model the dynamics of the long-term swap yield. The findings reinforce and extend John Maynard Keynes’s conjecture that in advanced countries, as well as emerging market economies such as China, …

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An Analysis Of Demand-Pull Inflation In The United States Post-Pandemic, Isabella A. Moynihan Jan 2023

An Analysis Of Demand-Pull Inflation In The United States Post-Pandemic, Isabella A. Moynihan

Honors Theses

The COVID-19 pandemic led to a global shutdown of the economy resulting from both demand and supply shocks. Also, the significant decline in output and employment in the immediate aftermath of the pandemic led to a fast reaction from the government in the form of large fiscal rescue packages. At the end of 2021, the acceleration of inflation, which had been dormant for more than four decades, became the main topic of macroeconomic debates. The debate has revolved around the influence of cost-push versus demand-pull causes of inflation. The dominant view in the United States has been that inflation resulted …

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The Limits Of Financial Equity: The Federal Reserve, The Depression Of 1921, And The End Of Wilsonian Progressivism, Terril Hebert Nov 2022

The Limits Of Financial Equity: The Federal Reserve, The Depression Of 1921, And The End Of Wilsonian Progressivism, Terril Hebert

LSU Master's Theses

The Limits of Financial Equity: The Federal Reserve, the Depression of 1921, and the End of Wilsonian Progressivism is an examination of monetary policy and centralized macroeconomic planning in the American economy during the inflationary spiral of the 1910s that culminated in the Depression of 1921. Put forward for consideration is the successful populist campaign for agricultural credit equity by the burgeoning Federal Reserve System; set against a backdrop of intentional inflation, world and domestic citizens competed against as the price and supply chain distortions perpetuated by the policing of American commerce by the Food Administration, A. Mitchell Palmer’s Department …

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Is Fed Policy In The Eye Of The Beholder?, Leo Krippner, Thomas Lam Sep 2022

Is Fed Policy In The Eye Of The Beholder?, Leo Krippner, Thomas Lam

Sim Kee Boon Institute for Financial Economics

While the US Federal Reserve remains vigilant on inflation, it will likely continue its tightening cycle with caution, with an eye on market expectations about future policy actions and financial conditions.

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Skbi Big 5 Survey 2022 August, Singapore Management University Aug 2022

Skbi Big 5 Survey 2022 August, Singapore Management University

Sim Kee Boon Institute for Financial Economics

The latest survey results on the largest five economies (Big5) were revised markedly relative to the prior release (pre-Russia-Ukraine conflict), generally indicating weaker growth and higher inflation coupled with incremental ambiguity on the policy front.

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Inflation Expectations Can Be A Self-Fulfilling Prophecy, Aurobindo Ghosh, Khyati Chauhan, Muskan Bagrodia Aug 2022

Inflation Expectations Can Be A Self-Fulfilling Prophecy, Aurobindo Ghosh, Khyati Chauhan, Muskan Bagrodia

Research Collection Lee Kong Chian School Of Business

In a commentary, SMU Assistant Professor of Finance (Education) Aurobindo Ghosh, SMU postgraduate student and Research Assistant for the SInDEx Project Muskan Bagrodia and International Monetary Fund Economic Research Assistant Khyati Chauhan weighed in on why inflation expectations matter as much as economic data. They discussed how inflation expectations can be a self-fulfilling prophecy, and shared the key takeaways of the quarterly DBS-Sim Kee Boon Institute’s Singapore Index of Inflation Expectations (DBS-SKBI SInDEx) survey. They concluded that effective communication on inflation control measures, in addition to credible policy decisions, will help consumers feel assured and refrain from basing purchasing decisions …

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Inflation Variations In Egypt: An Asymmetrical Analysis Of Pass-Through Effects, Yassmina Rashad Helmi Abouelhassan Jun 2022

Inflation Variations In Egypt: An Asymmetrical Analysis Of Pass-Through Effects, Yassmina Rashad Helmi Abouelhassan

Theses and Dissertations

Inflation variations has become an issue that impedes efficient resource allocation and inclusive growth in Egypt. High inflationary pressures negatively affect standards of living, poverty alleviation and finally markets’ efficiency. For the past decade, Research on the causes of inflation in emerging markets has been closely linked to exchange rates pass-through (ERPT). This is due to its perceived impacts on import prices and terms of trade shocks, which lead to a pass-through effect to domestic inflation. This research aims to contribute to the literature by investigating ERPT in Egypt with a nonlinear Autoregressive distributed lag model (NARDL). Recent research on …

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Modern Monetary Theory: Merits, Critiques, And Contemporary Implications, Rebecca Singleton, Thomas Herndon May 2022

Modern Monetary Theory: Merits, Critiques, And Contemporary Implications, Rebecca Singleton, Thomas Herndon

Honors Thesis

The study of macroeconomics is a diverse field, with conflicting opinions and numerous camps of thought. The election of 2016 brought this to the public attention, as the appointment of Stephanie Kelton as Senator Bernie Sanders’s campaign economic advisor brought Dr. Kelton’s heterodox school of macroeconomic policy to the attention of mass media. In particular, Modern Monetary Theory became a public discussion, particularly in the wake of stimulus spending during the COVID-19 pandemic. Modern Monetary Theory (MMT), a heterodox macroeconomic theory most discussed in far-left and post-Keynesian academic circles, has faced backlash from a centrist mass media. I investigate the …

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Inflation And Ukraine War Make It Challenging For Our Beloved Value Stores To Survive, Aurobindo Ghosh, Taimur Baig May 2022

Inflation And Ukraine War Make It Challenging For Our Beloved Value Stores To Survive, Aurobindo Ghosh, Taimur Baig

Research Collection Lee Kong Chian School Of Business

In a joint commentary, SMU Assistant Professor of Finance (Education) and Principal Investigator of DBS-SKBI Singapore Index of Inflation Expectations Project Aurobindo Ghosh and Chief Economist and Managing Director at DBS Bank Dr Taimur Baig discussed how global inflationary pressures and rising commodity prices due to war in Ukraine and sanctions against Russia are culminating into a perfect storm and making it challenging for value stores to survive. They also gave advice on what value stores can do to survive this perfect storm.

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Big Data And Inflation Forecasting In Nigeria: A Text Mining Application., M. A. Adebiyi, A. O. Adenuga, T. S. Olusegun, O. O. Mbutor Mar 2022

Big Data And Inflation Forecasting In Nigeria: A Text Mining Application., M. A. Adebiyi, A. O. Adenuga, T. S. Olusegun, O. O. Mbutor

Economic and Financial Review

The success of monetary policy is substantially predicated on the availability of reliable forecast of inflation. However, the shocks arising from COVID-19 and the Russia-Ukraine war have brought about significant economic uncertainties; thus, necessitating the fine-tuning of existing forecasting models of the Central Bank of Nigeria. This study explores the usefulness of public sentiments obtained using machine learning methods to improve the predictive power of the existing short-term inflation forecasting model (STIF) in Nigeria. Findings indicate that, for all components of inflation, models that include the computed sentiment index perform better in both in-sample and out-sample forecasts than those excluding …

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