The Mechanism of Domestic Inflation

2020 ◽  
pp. 65-69
Author(s):  
Jean Paul Cleron
Keyword(s):  
Domestic Inflation

Building a Surveillance Framework for Currency Crises in Indonesia

2019 ◽  
pp. 718-739
Author(s):  
Dimas Bagus Wiranatakusuma ◽  
Ricky Dwi Apriyono
Keyword(s):  
Early Warning System ◽  
Extraction Method ◽  
Currency Crises ◽  
Real Exchange Rates ◽  
Financial System ◽  
Warning System ◽  
Signal Extraction ◽  
Open Position ◽  
Market Pressure ◽  
Domestic Inflation

There seems to be no single country that can escape from currency crises. This paper aims to answer: (i) How to determine exchange market pressure (EMP)? and (ii) To what extent the contribution of selected indicators to the prediction of currency crises?. The study adopts indicators developed by Kaminski, et.al (1999) by using signal extraction method as the early warning system (EWS) mechanism. By employing four selected variables, International reserve, real exchange rates, credit growth, and domestic inflation, the findings suggest the periods of crises fluctuated over the observations under various thresholds. The EMP touched the Kaminsky's line only during the Asian and global financial crises. Meanwhile, the Garcia's, Park's and Lestano's line was passed through frequently over the observations, and it implies that the financial system was cyclically under shocks. In conclusion, the currency crises frequently appear attacking Indonesia's financial system so that need to be mitigated by net open position (NOP) as macroprudential instrument.

WHICH INFLATION TO TARGET? A SMALL OPEN ECONOMY WITH STICKY WAGES

2012 ◽  
Vol 18 (1) ◽  
pp. 145-174 ◽  
Author(s):  
Alessia Campolmi
Keyword(s):  
Open Economy ◽  
Inflation Targeting ◽  
Consumer Price Index ◽  
Small Open Economy ◽  
Target Variable ◽  
Price Inflation ◽  
Standard Result ◽  
Trade Elasticity ◽  
Sticky Wages ◽  
Domestic Inflation

There is common agreement on price inflation stabilization being one of the objectives of monetary policy. But, in an open economy, two alternative measures of inflation coexist: domestic inflation and consumer price inflation. Which of the two should be the target variable? Most of the new open economy macroeconomics (NOEM) literature suggests that the monetary authority should stabilize domestic inflation. This is in sharp contrast with the practice of many inflation-targeting central banks that are using consumer price index (CPI) inflation as target variable. The paper shows that the standard result in the NOEM literature is derived under the simplifying assumption of flexible wages. The inclusion of sticky wages in an otherwise standard small open economy model is shown to rationalize CPI inflation targeting. This conclusion is robust to changes in key parameters, including the trade elasticity.

Commodity Prices and Domestic Inflation in India

2011 ◽  
Vol 3 (2) ◽  
pp. 223-246 ◽  
Author(s):  
Ajit R. Joshi ◽  
Debashis Acharya
Keyword(s):  
Commodity Prices ◽  
Domestic Inflation

scholarly journals Links or disconnect: a first consideration of inflation expectations and inflation credibility, with specific reference to South Africa

2011 ◽  
Vol 12 (4) ◽  
pp. 475-492 ◽  
Author(s):  
Jannie Rossouw ◽  
Vishnu Padayachee ◽  
Adel Bosch
Keyword(s):  
South Africa ◽  
South African ◽  
Specific Reference ◽  
Inflation Expectations ◽  
International Literature ◽  
Male And Female ◽  
South Africans ◽  
General Lack ◽  
Domestic Inflation

This paper compares international and domestic inflation expectations and inflation credibility, and hypothesises about a possible link or disconnect between inflation expectations and inflation credibility among South Africans.  No similar tests have previously been performed using South African data, and there is also a general lack of domestic and international literature on any such possible link or disconnect.  While research shows that inflation expectations are taken into account by all countries targeting inflation, inflation credibility is very seldom considered.  Although the hypothesis is confirmed in certain instances, it is refuted by a disconnect between the inflation expectations and inflation credibility of male and female respondents in South Africa, which cannot be explained by available data.

An Empirical Study on International Transmission Path of Inflation in China

2014 ◽  
Vol 926-930 ◽  
pp. 3741-3745
Author(s):  
Hai Yue Liu
Keyword(s):  
Empirical Study ◽  
Economic Reform ◽  
Economic Globalization ◽  
Inflation Expectations ◽  
Closed Economy ◽  
Negative Effects ◽  
International Transmission ◽  
Transmission Path ◽  
Domestic Inflation

In the background of economic globalization and integration, a country's economy will move from closing to opening. While sharing the benefits of this opening economy, it will also bear the negative effects, including "international transmission of inflation" which deserves the widespread concern. With the in-depth development of China's economic reform, China is gradually transferring from a closed economy to an open one. According to the cause of inflation from 2003 to 2007, it cannot be fully attributed to domestic factors. The new domestic inflation from 2010 to 2011 is closely related to the input factors and until the current macroeconomic inflation expectations are obvious. This paper aims to make an empirical study on the data from 2003 to 2012, and to analyze how smooth the international transmission paths of inflation in China.

scholarly journals Pengaruh Globalisasi Ekonomi terhadap Inflasi: Pendekatan Data Panel

2019 ◽  
Vol 15 (2) ◽  
pp. 116-126
Author(s):  
Nona Widharosa ◽  
Sri Andaiyani
Keyword(s):  
Inflation Rate ◽  
Negative Relationship ◽  
Economic Globalization ◽  
Fixed Effect Model ◽  
Model Specification ◽  
Specification Test ◽  
Effect Model ◽  
Significant Negative Relationship ◽  
Open Country ◽  
Domestic Inflation

There are similarities in views from economic researchers that globalization can have an impact on the behavior of domestic inflation. So that the characteristics of inflation which was initially only associated with domestic factors, became interesting to observe its relationship with economic globalization. Romer (1993) states that a more open country in the economy will have a lower inflation rate. This study aims to test the Romer hypothesis by analyzing the effect of the level of economic globalization on inflation in 102 countries during 1993 - 2013. The model specification test shows that the best method for this research data is the Fixed Effect Model (FEM). The results of the study concluded that there is a significant negative relationship between economic globalization and inflation

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