scholarly journals India’s Inflation Process Before and After Flexible Inflation Targeting

2020 ◽  
Vol 20 (251) ◽  
Author(s):  
Patrick Blagrave ◽  
Weicheng Lian
Keyword(s):  
Inflation Targeting ◽  
Structural Changes ◽  
Phillips Curve ◽  
Structural Model ◽  
Food Prices ◽  
Policy Implications ◽  
Inflation Expectations ◽  
Curve Estimation ◽  
Core Inflation ◽  
Before And After

We study the inflation process in India, focusing on the periods before and after the adoption of flexible inflation-forecast targeting (FIT) in India. Our analysis uses several approaches including standard Phillips curve estimation for headline and core inflation, an examination of the sensitivity of medium-term inflation expectations to inflation surprises, and the properties of convergence between headline and core inflation. Results indicate an important role for domestic factors in driving the inflation process, and there is evidence that expectations have become more anchored since 2015. This result could be attributable to FIT adoption, or to persistently low food prices which dominate the post-FIT-adoption period. The policy implications of these structural changes in the inflation process are investigated using a semi-structural model calibrated to the Indian economy.

scholarly journals FLEXIBLE INFLATION TARGETING AND INFLATION PERSISTENCE IN INDONESIA: THE TRADITIONAL UNIVARIATE AND FRACTIONAL INTEGRATED UNIVARIATE APPROACHES

2020 ◽  
Vol 8 (5) ◽  
pp. 81-87
Author(s):  
Zainuri Zainuri ◽  
Muhammad Iqbal Fasa ◽  
Roymon Panjaitan ◽  
Fauzul Hanif Noor Athief
Keyword(s):  
Inflation Targeting ◽  
Food Prices ◽  
Inflation Expectations ◽  
Price Inflation ◽  
Inflation Persistence ◽  
Return To Equilibrium ◽  
Core Inflation ◽  
The Core ◽  
High Degree ◽  
Recent Policy

Purpose of the study: The high degree of inflation persistence will impact the Indonesian economy. The purpose of this study is to determine the degree of inflation persistence in Indonesia following the adoption of a flexible Inflation Targeting Framework (ITF). Methodology: Traditionally integrated univariate and fractional approach will be carried out in this research. The inflation variables used are core inflation, administered price inflation, volatile inflation, and general inflation. The data used is from 2014M1 to 2019M2. Main Findings: After data analysis, the researchers found that high persistence behaviors are found, especially in the core, administered, and volatile inflation, following the flexible adoption of the ITF. The time it takes for inflation to return to equilibrium is 1 to 8 months for each group. Applications of this study: The result is important for the highest authorities in improving their policy. Structural improvements through monetary policy based on inflation expectations, increasing the transparency of food prices, and synergy with Central as well as Regional Inflation Control is suggested for the authorities. Novelty/Originality of this study: This study presents a different perspective of research within the inflation topic. It takes the recent policy implementation of a country and analyses its effect. To the best of the authors knowledge, this research is the first to explain the effect of the Inflation Targeting Framework on Indonesia's inflation condition.

scholarly journals The Flattening of the Phillips Curve: Policy Implications Depend on the Cause

2019 ◽  
pp. 1-7 ◽  
Author(s):  
Filippo Occhino
Keyword(s):  
Monetary Policy ◽  
Structural Changes ◽  
Phillips Curve ◽  
Policy Implications ◽  
The Past ◽  
Different Types ◽  
Historical Relationship

According to the historical relationship known as the Phillips curve, strengthening of the economy is commonly associated with increasing inflation. With inflation having only modestly picked up in the past few years as the economy has become more robust, many believe the Phillips curve relationship has weakened, with the curve becoming flatter. I show that the flattening can be due to very different types of structural changes and that knowing the type of change that has occurred is crucial for choosing the appropriate monetary policy.

scholarly journals Nonlinearities and asymmetric adjustment to PPP in an exchange rate model with inflation expectations

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christina Anderl ◽  
Guglielmo Maria Caporale
Keyword(s):  
Exchange Rate ◽  
Purchasing Power Parity ◽  
Inflation Targeting ◽  
Real Exchange Rates ◽  
Policy Implications ◽  
Inflation Expectations ◽  
Ardl Model ◽  
Content Type ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag

PurposeThis paper aims to explain real exchange rate fluctuations by means of a model including both standard fundamentals and two alternative measures of inflation expectations for five inflation targeting countries (the UK, Canada, Australia, New Zealand and Sweden) over the period January 1993–July 2019.Design/methodology/approachBoth a benchmark linear autoregressive distributed lag (ARDL) model and a nonlinear autoregressive distributed lag (NARDL) specification are considered.FindingsThe results suggest that the nonlinear framework is more appropriate to capture the behaviour of real exchange rates given the presence of asymmetries both in the long and short run. In particular, the speed of adjustment towards the purchasing power parity (PPP) implied long-run equilibrium is three times faster in a nonlinear framework, which provides much stronger evidence in support of PPP. Moreover, inflation expectations play an important role, with survey-based ones having a more sizable effect than market-based ones.Originality/valueThe focus on linearities and the estimation of a NARDL model, which is shown to outperform the linear ARDL model both within sample and out of sample, is an important contribution to the existing literature which has rarely applied this type of framework; the choice of an appropriate econometric method also makes the policy implications of the analysis more reliable; in particular, monetary authorities should aim to achieve a high degree of credibility to manage them and thus currency fluctuations effectively; the inflation targeting framework might be especially appropriate for this purpose.

scholarly journals Synthesis and Physicochemical Characterization of Anion Exchanger Based on Green Modified Bottle Gourd Shell

2018 ◽  
Vol 2018 ◽  
pp. 1-16 ◽  
Author(s):  
Dragana Z. Marković-Nikolić ◽  
Aleksandar Lj. Bojić ◽  
Saša R. Savić ◽  
Sanja M. Petrović ◽  
Dragan J. Cvetković ◽  
...  
Keyword(s):  
Structural Changes ◽  
Structural Model ◽  
Physicochemical Characterization ◽  
Morphological Characterization ◽  
Bottle Gourd ◽  
Trimethylammonium Chloride ◽  
Synthesis Conditions ◽  
Before And After ◽  
Extractive Substances ◽  
Physicochemical Methods

The structural performance and biosorption behavior of a new cationic biosorbent (CALV) prepared from bottle gourd (Lagenaria vulgaris) shell (LVS) as a potentially valuable agrowaste have been established. The biosorbent with anion exchangeable function was synthesized from a modified lignocellulosic biomass (MLV) by a quaternary ammonium agent, N-(3-chloro-2-hydroxypropyl)trimethylammonium chloride. Preparation of the appropriate MLV precursor was firstly carried out by the process of alkaline pretreatment of LVS biomass using a green carbonate solution. In this way, partial delignification, removal of extractive substances, and increased porosity of the cellulose-enriched MLV biomass, as well as the activation of available cellulosic microfibrils to alkaline-cellulose have been achieved. The optimization of synthesis conditions was carried out by direct estimation of the CALV biosorption efficiency to phosphate (using ICP-OES) and nitrate (using UV-VIS) from the aqueous solutions. The structural changes of MLV precursors during green modification and the success of synthesis and biosorbent performances before and after the removal of anions from contaminated solutions have been registered and clarified by physicochemical methods, which include elemental analysis, chemical constitution, morphological characterization, and FTIR spectroscopy. In accordance with the FTIR spectroscopic analysis and isotherm studies, a structural model of the CALV biosorbent and its ion exchange mechanism are proposed.

scholarly journals Core Inflation, Expectations and Inflation Dynamics in Brazil

2019 ◽  
Vol 11 (6) ◽  
pp. 1
Author(s):  
Antônio Clécio de Brito ◽  
Elano Ferreira Arruda ◽  
Ivan Castelar ◽  
Nicolino Trompieri Neto ◽  
Cristiano Santos
Keyword(s):  
Phillips Curve ◽  
Generalized Method Of Moments ◽  
New Keynesian ◽  
Inflation Expectations ◽  
Inflation Dynamics ◽  
Monthly Data ◽  
Core Inflation ◽  
The Core ◽  
Inflation Forecasts ◽  
Forward Looking

This work investigates the adequacy of core inflation measures as indicators of forward-looking expectations in the hybrid new Keynesian Phillips curve (HNKPC) for the Brazilian economy. For that purpose, we use monthly data between January 2002 and August 2015 and the heteroscedasticity and autocorrelation consistent generalized method of moments (HAC-GMM). The results indicate that the HNKPC is a robust mechanism to model Brazilian inflation dynamics in the period analyzed; that the recent increase in the degree of indexation of the Brazilian economy seems to have contributed to the formation of a stronger inertial component of inflation; and also that the core inflation measures appear to be potential indicators to model forward-looking expectations in the HNKPC in Brazil. Furthermore, the inflation forecasts extracted from these models are statistically similar to those generated by models that use market prognoses from the Focus survey published by the Central Bank of Brazil. Therefore, the core inflation measures appear to have adequately anchored the inflation expectations in Brazil in the period analyzed.

scholarly journals INFLATION TARGETING IN THE COUNTRIES WITH MIDDLE AND LOW INCOME: TRADITIONAL DILEMES AND POST-CRISIS CHALLENGES

2019 ◽  
pp. 8-22
Author(s):  
Viktor KOZYUK
Keyword(s):  
Exchange Rates ◽  
Inflation Targeting ◽  
Emerging Market ◽  
Inflation Expectations ◽  
Supply Side ◽  
Structural Reforms ◽  
Macroprudential Policy ◽  
Core Inflation ◽  
Emerging Market Countries ◽  
Inflation Targets

Introduction. It is focused on the problem inflation targeting regime evolvement in emerging market countries. The generalization of key problems is done relying on literature review and overview of empirical works. Purpose of the paper is to show how the way of thinking about inflation targeting in emerging market countries is changed according to they economic and financial development as well as they connections with global economy. It is distinct some the most disputable and progressmade arrears of inflation targeting in less developed countries: connections between price and exchange rate stability; reactions on the supply-side shocks; institutional drivers of deviations from the targets; cointegration between inflation targeting and macroprudential policy. It is fount the more country advanced in the structural reforms the less sensitive price stability to exchange rates movements is and term-of-trade shocks more resemble supply-side shocks. But central banks from emerging market countries couldn’t stay neglect of supply-side shocks because of more sensitive inflation expectations to core-inflation reaction on non-core inflation behavior. While commodity shocks may easily deteriorate movements of the most volatile components of price index supply-side shocks are more like persistent in nature. Not to react on them according to orthodox New-Keynesian theory is very risky especially then inflation expectations are not strongly anchored. Results. Deviations from inflation targets are viewed from institutional position meaning that political environment as well as factual central bank’s independence is important and markets flexibility, that minimizes costs of stronger reaction on price shocks, is a consequence of structural reforms. Financial stability in emerging markets is viewed from capital flows and exchange rates volatility perspective that may bring additional conflicts with inflation targets. Conclusions. It is stressed that monetary policy in emerging markets will benefited from more active approach on financial imbalances. That is why inflation targeting with pro-active macroprudential policy is shown as example of relevant policy-mix for better macroeconomic performance.

scholarly journals Development of the fundamentals of DSGE-modeling

2021 ◽  
Vol 2021 (01) ◽  
pp. 67-85
Author(s):  
Serhii Shvets` ◽  
◽  
Keyword(s):  
Structural Changes ◽  
Phillips Curve ◽  
Radical Change ◽  
New Keynesian ◽  
Dsge Models ◽  
Inflation Expectations ◽  
Macro Modeling ◽  
Theoretical Approaches ◽  
New Instrument ◽  
Dynamic Stochastic

This article attempts to analyze the evolution of approaches that constitute grounds for macro modeling. The counteraction to destructive consequences of crises assumes practical use of model apparatus as a necessary tool for preventing destabilization. The article aims to study the progressive stages and identify unsettled issues and promising ways to assist macro models' evolution. The fundamental Marshall's and Walras's platforms supported progressive changes following the destructive Great Depression and Great Inflation in the USA in 1920-1970 and marked a new trend in macro modeling called dynamic stochastic general equilibrium (DSGE) models. The new instrument is remarkable for a radical change in macro modeling approaches, where microeconomics comes to the fore. DSGE models debuted by invoking four essential ingredients: the Phillips curve, adaptive inflation expectations, anchoring nominal prices, and an endogenous production function. The progression stages of theoretical approaches to macro modeling incorporate the classical and Keynesian schools' advanced innovations. The evolution of macro modeling has five generations of models: Keynesian, classical, RBS, new Keynesian, and new Keynesian DSGE models. Among advantages of DSGE models are "political neutrality," distinguishing the shocks into economic and political ones, and establishing the upshots of significant structural changes in the economy. The next generation of macro models is called to solve four pressing issues: establishing financial frictions, relaxing rational expectations, introducing heterogeneous agents, and underpinning the framework with more appropriate microfoundations.

scholarly journals COMMODITY PRICE AND INFLATION DYNAMICS: EVIDENCE FROM BRIICS

2021 ◽  
Vol 23 (4) ◽  
pp. 485-500
Author(s):  
Syed Aun R. Rizvi ◽  
Sahminan Sahminan
Keyword(s):  
South Africa ◽  
Inflation Targeting ◽  
Phillips Curve ◽  
Commodity Prices ◽  
Price Volatility ◽  
Commodity Price ◽  
Food Prices ◽  
Energy Prices ◽  
Commodity Price Volatility ◽  
The Impact

In this study, we use a commodity augmented Phillips curve to investigate the impact of global commodity prices on domestic inflation in Brazil, Russia, India, Indonesia, China, and South Africa. Oil and energy prices cause inflationary pressures in all countries, except Russia, where they cause deflationary pressures. In Indiaand Indonesia, global food prices are highly significant and positively related to inflation, while in South Africa precious metal prices impact inflation negatively. For policymakers, this study provides insights on the domestic adjustments required for inflation targeting in response to global commodity price volatility.

scholarly journals The Impact of the Amendment of Taiwan’s Certified Public Accountant Act in 2007 on Large Accounting Firms

2021 ◽  
Vol 13 (3) ◽  
pp. 1229
Author(s):  
Chung-Cheng Yang ◽  
Jianxiong Chen ◽  
Wen-Chi Yang
Keyword(s):  
Policy Implications ◽  
Certified Public Accountant ◽  
Accounting Firms ◽  
Survey Report ◽  
Audit Firms ◽  
Before And After ◽  
Theory Of Law ◽  
Revenue Function ◽  
The Impact ◽  
Public Accountant

Taiwan’s Financial Supervisory Commission of the Executive Yuan promulgated the fully amended Certified Public Accountant Act in 2007, which directly led to significant changes in accounting law. From the perspective of the economic theory of law, this study investigates the amendment of the Certified Public Accountant Act resulting in an increase or decrease in the overall revenue and different revenue shares of accounting firms, and puts forward measures that should be taken by accounting firms and stakeholders. We focus on large accounting firms and divide the sample period into before and after 2008. This study uses the translog revenue function and revenue share functions of the public accounting industry, and based on the 1989–2017 Survey Report of Audit Firms in Taiwan, and we find that the amendment of the Certified Public Accountant Act has had a positive effect on overall revenue, increasing overall revenue and the overall management advisory services shares, and in reducing the overall accounting and auditing shares and tax services shares of large accounting firms. Additional analyses provide regulators with public policy implications and provide accounting firms with managerial information.

scholarly journals Investigation of Hydrothermally Stressed Silicone Rubber/Silica Micro and Nanocomposite for the Coating High Voltage Insulation Applications

Materials ◽  
2021 ◽  
Vol 14 (13) ◽  
pp. 3567
Author(s):  
Faiza Faiza ◽  
Abraiz Khattak ◽  
Safi Ullah Butt ◽  
Kashif Imran ◽  
Abasin Ulasyar ◽  
...  
Keyword(s):  
Silicone Rubber ◽  
Structural Changes ◽  
Polymer Chains ◽  
Hydrothermal Conditions ◽  
Silica Filler ◽  
Before And After ◽  
Aging Conditions ◽  
The Stability ◽  
Micro Silica ◽  
Applied Stresses

Silicone rubber is a promising insulating material that has been performing well for different insulating and dielectric applications. However, in outdoor applications, environmental stresses cause structural and surface degradations that diminish its insulating properties. This effect of degradation can be reduced with the addition of a suitable filler to the polymer chains. For the investigation of structural changes and hydrophobicity four different systems were fabricated, including neat silicone rubber, a micro composite (with 15% micro-silica filler), and nanocomposites (with 2.5% and 5% nanosilica filler) by subjecting them to various hydrothermal conditions. In general, remarkable results were obtained by the addition of fillers. However, nanocomposites showed the best resistance against the applied stresses. In comparison to neat silicone rubber, the stability of the structure and hydrophobic behavior was better for micro-silica, which was further enhanced in the case of nanocomposites. The inclusion of 5% nanosilica showed the best results before and after applying aging conditions.

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