Price inflation and wage inflation

1988 ◽  
Vol 27 (1) ◽  
pp. 35-40 ◽  
Author(s):  
Augustin Kwasi Fosu ◽  
Shamsul Huq
Keyword(s):  
Price Inflation ◽  
Wage Inflation

scholarly journals The Taylor principle is valid under wage stickiness

2016 ◽  
Vol 16 (2) ◽  
Author(s):  
Alexis Blasselle ◽  
Aurélien Poissonnier
Keyword(s):  
Continuous Time ◽  
Limit Case ◽  
Policy Rule ◽  
Price Inflation ◽  
Trade Off ◽  
Wage Stickiness ◽  
Keynesian Model ◽  
Monetary Policy Rule ◽  
Relevant Variables ◽  
Wage Inflation

AbstractWe consider the textbook neo-Keynesian model with staggered prices and wages in discrete time. We prove analytically that the Taylor principle holds in this case. When both contracts exhibit sluggish adjustment to market conditions, the policy maker faces a trade-off between stabilizing three welfare relevant variables: output, price inflation and wage inflation. We consider a monetary policy rule designed accordingly: the central banker can react to both inflations and the output gap. In addition to generalizing the Taylor principle we show that the frontier of determinacy embeds the frontier derived with staggered prices only, generalizes the frontier of determinacy in the limit case of continuous time and is symmetric in price and wage inflations.

Chapter I. The Home Economy

1986 ◽  
Vol 118 ◽  
pp. 6-17
Keyword(s):  
Slow Growth ◽  
National Accounts ◽  
Fixed Investment ◽  
Price Inflation ◽  
Public Consumption ◽  
Wage Inflation

The phase of relatively slow growth, that started early in 1985, continued at least up to the second quarter of this year—the last quarter for which there are full national accounts. GDP was probably then some 1½ or 2 per cent higher than a year before; the slightly higher figure is suggested by the output estimate, the lower one by the average estimate. This increase depended almost wholly on a rise of 5 per cent in consumers' expenditure, whose real incomes rose rapidly as price inflation slowed down and wage inflation did not. Exports barely changed. So did public consumption. Fixed investment increased between the second quarters of 1985 and 1986, but not between the first halves of the two years—a comparison less affected by fluctuations in leasing expenditure in anticipation of changes in capital allowances. Investment in stocks was also constant, comparing half years.

Summary and Appraisal

1986 ◽  
Vol 117 ◽  
pp. 3-4
Keyword(s):  
Total Output ◽  
Price Inflation ◽  
The Past ◽  
Investment Demand ◽  
Wage Inflation

Consumers' real incomes and their expenditure are rising quite fast, the slowdown in price inflation unaccompanied yet by any slowdown in wage inflation. But the increase in investment demand has slackened and exports have stagnated since early last year. For the past 12 months or more total output has grown comparatively slowly as a result. It was probably about 1 ½ per cent higher in the second quarter than a year before. Manufacturing production may not have increased at all. These developments are broadly in line with the forecasts we were making a year ago.

scholarly journals Optimal Monetary Policy with Staggered Wage and Price Contracts

2019 ◽  
Vol 52 (4) ◽  
pp. 537-572
Author(s):  
Christopher J. Erceg ◽  
Dale W. Henderson ◽  
Andrew T. Levin
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Monopolistic Competition ◽  
Jel Classification ◽  
Output Gap ◽  
Optimal Monetary Policy ◽  
Price Inflation ◽  
Agent Model ◽  
Welfare Losses ◽  
Wage Inflation

Abstract We formulate an optimizing-agent model in which both labor and product markets exhibit monopolistic competition and staggered nominal contracts. The unconditional expectation of average household utility can be expressed in terms of the unconditional variances of the output gap, price inflation, and wage inflation. Monetary policy cannot achieve the Pareto-optimal equilibrium that would occur under completely flexible ­wages and prices; that is, the model exhibits a tradeoff in stabilizing the output gap, price inflation, and wage inflation. We characterize the optimal policy rule for reasonable calibrations of the model. We also find that strict price inflation targeting generates relatively large welfare losses, whereas several other simple policy rules perform nearly as well as the optimal rule. JEL Classification: E31; E32; E52

scholarly journals The role and significance of planning in the determination of house prices in Australia: Recent policy debates

2021 ◽  
pp. 0308518X2198894
Author(s):  
Peter Phibbs ◽  
Nicole Gurran
Keyword(s):  
Land Use ◽  
Housing Market ◽  
Land Use Planning ◽  
House Prices ◽  
Housing Prices ◽  
House Price ◽  
Evidence Base ◽  
Urban Housing ◽  
Price Inflation ◽  
Depth Analysis

On the world stage, Australian cities have been punching above their weight in global indexes of housing prices, sparking heated debates about the causes of and remedies for, sustained house price inflation. This paper examines the evidence base underpinning such debates, and the policy claims made by key commentators and stakeholders. With reference to the wider context of Australia’s housing market over a 20 year period, as well as an in depth analysis of a research paper by Australia’s central Reserve Bank, we show how economic theories commonly position land use planning as a primary driver of new supply constraints but overlook other explanations for housing market behavior. In doing so, we offer an alternative understanding of urban housing markets and land use planning interventions as a basis for more effective policy intervention in Australian and other world cities.

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