This paper shows that plausible modifications to the Taylor rule for monetary policy can help explain several empirical anomalies to the behavior of inflation in the new-Keynesian general equilibrium model. The key anomalies considered are (1) the persistence of inflation, both in reduced form and after conditioning on inflation’s driving processes, (2) the positive correlation between the outp...

Empirical support for the long-run Fisher effect, a hypothesis that a permanent change in inflation leads to an equal change in the nominal interest rate, has been hard to come by. This paper provides a plausible explanation of why past studies have been unable to find support for the long-run Fisher effect. This paper argues that the necessary permanent change to the inflation rate following a...

Economists often comment that inflation will tend to increase (or decrease) if growth is higher or lower than the 'potential' growth rate of the the economy. After setting out a theoretical justification for such a relationship we estimate equations relating the change in inflation to growth rates for the US, Canada and Australia. Our system also allows for the possibility that traded goods pri...

This study attempts to estimate the rate of inflation in Pakistan by the stochastic approach to index numbers by allowing systematic changes in relative prices. This approach provides not only point estimate but also confidence interval for the rate of inflation. There are two types of approaches to index number theory namely: the functional economic approaches and the stochastic approach. The ...

This paper conducts empirical investigation on the relationship between exchange rate and inflation targeting regime in the three developed and three emerging Asian economies that have adopted inflation targeting (IT) regime. Using a multivariate GARCH model under BEKK specification, we investigate if exchange rate affect the performance of IT and the performance of IT is compared between Asian...

Introduction Nowadays, interventional cardiology brought a great success to the treatment of many cardiovascular disorders. Despite these great beneficial effects, it has side effects related to the applied techniques. Among them, inflation pressure and pattern of inflation play fundamental role in this regard. By low and very high inflation pressures, the rate of stent thrombosis and in-stent ...

This work investigated the determinants of inflation in Nigeria using a monthly data from January 2007 to August 2014. The ordinary least square (OLS) method was adopted because of its best linear unbiased estimator (BLUE) property. The result showed that expected inflation, exchange rate and money supply influenced inflation, while annual treasury bill rate and monetary policy rate though righ...

On October 6, 1979, the Federal Open Market Committee of the Federal Reserve System embarked on an aggressive policy to lower the inflation rate, which then stood near 12 percent. That effort succeeded: By the mid-1980s, the rate of change in the Consumer Price Index (CPI) was reduced to less than 4 percent on a three-year moving-average basis, as shown in figure 1. The commonly reported measur...