Uncertainty Shocks and Inflation Dynamics in the US

2020 ◽  
Author(s):  
Qazi Haque ◽  
Leandro M. Magnusson
Keyword(s):  
Inflation Dynamics ◽  
Uncertainty Shocks ◽  
The Us

Uncertainty shocks and inflation dynamics in the U.S.

2021 ◽  
Vol 202 ◽  
pp. 109825
Author(s):  
Qazi Haque ◽  
Leandro M. Magnusson
Keyword(s):  
Inflation Dynamics ◽  
Uncertainty Shocks ◽  
The U.S

Time-varying impact of uncertainty shocks on the US housing market

2019 ◽  
Vol 180 ◽  
pp. 15-20 ◽  
Author(s):  
Christina Christou ◽  
Rangan Gupta ◽  
Wendy Nyakabawo
Keyword(s):  
Housing Market ◽  
Time Varying ◽  
Uncertainty Shocks ◽  
The Us

scholarly journals Uncertainty shocks and policymakers’ behavior: evidence from the subprime crisis era

2015 ◽  
Vol 42 (4) ◽  
pp. 578-607 ◽  
Author(s):  
Michael Donadelli
Keyword(s):  
Empirical Evidence ◽  
Design Methodology ◽  
House Prices ◽  
Theoretical Framework ◽  
Subprime Crisis ◽  
Content Type ◽  
Uncertainty Shocks ◽  
The Us ◽  
Lehman Brothers ◽  
The Usa

Purpose – The purpose of this paper is to examine the effects of the 2007-2009 uncertainty shocks on policymakers’ behavior. Design/methodology/approach – Uncertainty shocks in the US credit, financial and production markets are represented by extraordinary events. As in Bloom (2009), these events are associated with significant economic and political shocks (e.g. Lehman Brothers’ collapse). Credit markets uncertainty shocks, which played a crucial role in the aftermath of the house prices collapse in the USA, are first analyzed in a bivariate VAR context, and then, embodied in a simple theoretical framework. Findings – The empirical evidence suggests that the US credit, financial and production markets have been affected by a relative large number of uncertainty shocks (i.e. rare events). In a Brainard’s (1967) uncertainty scenario, it is shown that a bizarre money-liquidity relationship exacerbates the “policymakers’ cautiousness-aggressiveness trade-off.” In addition, the model suggests that a “double” dose of policy, in presence of a global credit crunch, might be useless. Originality/value – This paper improves the existing literature in two main directions. First, it provides novel empirical evidence on the unusual dynamics of the US credit market and its effects on the real economic activity during the crisis. Second, in a very simple theoretical framework accounting for parameter uncertainty, it addresses whether a bizarre money-credit relationship affects policymakers’ behavior (i.e. cautiousness vs aggressiveness).

scholarly journals Uncertainty, agency costs and investment behavior in the Euro area and in the USA

2018 ◽  
Vol 25 (1) ◽  
pp. 122-143
Author(s):  
Johannes Strobel ◽  
Kevin D. Salyer ◽  
Gabriel S. Lee
Keyword(s):  
Business Cycles ◽  
Euro Area ◽  
Risk Premium ◽  
Agency Cost ◽  
Investment Behavior ◽  
Credit Channel ◽  
Content Type ◽  
Uncertainty Shocks ◽  
The Us ◽  
The Usa

Purpose The purpose of this paper is to analyze the credit channel effects on investment behavior for the US and the Euro area. Design/methodology/approach This paper uses the dynamic stochastic general equilibrium model and calibrates a version of the Carlstrom and Fuerst’s (1997) agency cost model of business cycles with time-varying uncertainty in the technology shocks that affect capital production. To highlight the differences between the US and European financial sectors, the paper focuses on two key components of the lending channel: the risk premium associated with bank loans and the bankruptcy rates. Findings This paper shows that the effects of minor differences in the credit market translate into large, persistent and asymmetric fluctuations in real and financial variables and depend on the type of shocks. The results imply that the Euro areas supply elasticities for capital are less elastic than that of the USA following a technology shock. Finally, the authors find that the adverse impact of uncertainty shocks is heterogeneous across countries and amplified by the steady-state bankruptcy rate and risk premium. Originality/value This paper quantifies the effects of uncertainty shocks when there is a credit channel due to asymmetric information between lenders and borrowers for the Euro area countries, and then compares the results to that of the USA. This paper shows that financial accelerator mechanism could potentially play a significant role in business cycles in the Euro area. This result directly lends one to conclude the following: the credit channel that affects the financial sector does indeed matter for macroeconomic behavior, and that policy makers should be attentive in smoothing out uncertainties if the economic policies are to lower the business and financial cycle volatilities.

scholarly journals Inflation dynamics in a dollarised economy: The case of Zimbabwe

2019 ◽  
Vol 20 (1) ◽  
pp. 94-117 ◽  
Author(s):  
W Kavila ◽  
P Le Roux
Keyword(s):  
South African ◽  
Money Supply ◽  
Inflation Rate ◽  
Inflation Dynamics ◽  
Local Currency ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
The Us ◽  
High Inflation ◽  
Main Determinants

This paper explores the dynamics of inflation in the dollarised Zimbabwean economy using the autoregressive distributed lag (ARDL) model with monthly data from 2009:1 to 2012:12. The main determinants of inflation were found to be the US dollar/South African rand exchange rate, international oil prices, lagged Zimbabwean inflation rate and South African inflation rate. During the local currency era, inflation dynamics in Zimbabwe were explained by excess growth in money supply, changes in import and administered prices, unit labour costs and output (Chhibber, Cottani, Firuzabadi & Walton 1989). According to Makochekanwa (2007), hyperinflation during the same era was attributed to excess money supply growth, lagged inflation and political factors. Coorey, Clausen, Funke, Munoz & Ould-Abdallah (2007) affirmed these findings by identifying excess money supply growth as a source of high inflation in Zimbabwe during the local currency era. In essence, the findings of this study point to a shift in inflation dynamics in Zimbabwe. This shift in inflation dynamics means that policies, which were used to respond to both internal and external shocks that have an impact on price formation, might not be applicable in a dollarised economy.

scholarly journals Regional Inflation Dynamics within and Across Euro Area Countries and a Comparison with the Us

2006 ◽  
Author(s):  
Kirstin Hubrich ◽  
Massimiliano Marcellino ◽  
Günter W. Beck
Keyword(s):  
Euro Area ◽  
Inflation Dynamics ◽  
The Us

The Eleventh Circuit Holds that Agreements in which Pharmaceutical Companies Pay Generic Companies Not to Compete May be Valid

2004 ◽  
Vol 32 (1) ◽  
pp. 181-184
Author(s):  
Amy Garrigues
Keyword(s):  
Pharmaceutical Companies ◽  
Court Decisions ◽  
Patent Holder ◽  
Trial Court ◽  
Court Of Appeals ◽  
The Us ◽  
Antitrust Laws ◽  
Per Se ◽  
Appeals Court ◽  
Two Sides

On September 15, 2003, the US. Court of Appeals for the Eleventh Circuit held that agreements between pharmaceutical and generic companies not to compete are not per se unlawful if these agreements do not expand the existing exclusionary right of a patent. The Valley DrugCo.v.Geneva Pharmaceuticals decision emphasizes that the nature of a patent gives the patent holder exclusive rights, and if an agreement merely confirms that exclusivity, then it is not per se unlawful. With this holding, the appeals court reversed the decision of the trial court, which held that agreements under which competitors are paid to stay out of the market are per se violations of the antitrust laws. An examination of the Valley Drugtrial and appeals court decisions sheds light on the two sides of an emerging legal debate concerning the validity of pay-not-to-compete agreements, and more broadly, on the appropriate balance between the seemingly competing interests of patent and antitrust laws.

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