Bank of Japan May 2011 The earthquake that struck Japan in March 2011 has reduced the supply capacity of the economy, which works in the direction of tightening the output gap. At the same time, however, if weak household and corporate sentiment lead to a decline in aggregate demand, this will work in the direction of increasing the slack in the economy. Moreover, developments in supply and dem...

absolute prices 156 accounting for cross-country income differences 13 The Accumulation of Capital 137 Acemoglu, Daron 5, 13–15, 74, 84 Acemoglu–Zilibotti model 14 aggregate capital-output ratio 11, 12 aggregate demand function 142, 182 aggregate dynamic analysis 52–3 aggregate effective labour supply 9 aggregate growth 8–9 aggregate labour income share 11 aggregate output, and demand 269 aggre...

F or gauging inflationary pressures, many policymakers and financial market analysts pay close attention to the behavior of wages. It is widely believed that if wage costs rise faster than productivity, the price level may rise as firms pass forward increased wage costs in the form of higher product prices. Hence changes in productivity-adjusted wages1 are believed to be a leading indicator of ...

this paper estimates the determinants of inflation in iran using a linear and non- linear regression model over the period 1959-2008. in the model specification, the conventional variables (liquidity, production and exchange rate) as well as positive and negative oil revenue shocks, monetary disequilibrium, and demand gap are considered. the results show that nonlinear time series regression mo...

Many studies have estimated the aggregate import demand function for Pakistan by using non-stationary data. Their findings suffer from the so-called ‘spurious regression’ problem. This study attempts to estimate the aggregate import demand function for Pakistan by employing Johansen and Juselius cointegration technique on the annual data for the period 1975-2005. Our results show that there is ...

The Consumer Price Index (CPI) attempts to answer the question of how much more (or less) income does a consumer require to be as well off in period 1 as in period given changes in prices, changes in the quality of goods, and the introduction of new goods (or the disappearance of existing goods). The CPI has not attempted to estimate the effect of the introduction of new goods, despite the reco...

We address the problem of aggregating demand across a group of consumers, who are identical in terms of wealth and face identical price vectors, but vary in their chosen consumption bundles. We show that, when a stochastic demand function is constructed to aggregate a number of deterministic demand functions, satisfaction of the weak axiom of stochastic revealed preference by this stochastic de...

This paper empirically investigates the relationship between CPI inflation uncertainty, and private investment in the Iranian economy from 1988 to 2010 by using quarterly data. We employ a bivariate VAR(5)-GARCH(1,1)-in-mean with diagonal BEKK model to discover in a unified framework how are the interactions between the variables. In the model, conditional variance of inflation and private inve...