Suchergebnisse

This paper first outlines the key stylized facts about changes in inflation dynamics in recent years: 1) inflation persistence has declined, 2) the Phillips curve has flattened, and 3) inflation has become less responsive to other shocks. These changes in inflation dynamics are interpreted as resulting from an anchoring of inflation expectations as a result of better monetary policy. The paper then goes on to draw implications for monetary policy from this interpretation, as well as implications for inflation forecasts.

Core CPI surprises (0.4% vs. 0.3% m/m) on the upside, while headline at consensus. Figure 1: CPI headline instantaneous inflation (a=4,T=12) (black), core (sky blue), supercore month-on-month (green), mean month-on-month (red). Instantaneous inflation per Eeckhout (2023). Source: BLS, Dallas Fed via FRED, BLS, and author's calculations. Recall the CPI inflation is on average (pre-pandemic) […]

Month-on-month CPI headline (core) at (0.1 ppt above) Bloomberg consensus. Month-on-month PPI 0.3 ppts above consensus of 0.4 ppts. Y/Y core CPI continues to decline, while instantaneous core inflation is flat. Figure 1: CPI headline y/y inflation (bold black), core y/y inflation (tan), m/m sticky price (pink), m/m median (red), m/m 16% trimmed (sky blue), […]

This paper examines the factors that explain and help forecast inflation in Pakistan. A simple inflation model is specified that includes standard monetary variables (money supply, credit to the private sector), an activity variable, the interest and the exchange rates, as well as the wheat support price as a supply-side factor. The model is estimated for the period January 1998 to June 2005 on a monthly basis. The results indicate that monetary factors have played a dominant role in recent inflation, affecting inflation with a lag of about one year. Private sector credit growth and broad money growth are also good leading indicators of inflation which can be used to forecast future inflation developments. JEL classification: E31, C22, C32 Keywords: Inflation, Pakistan, Leading Indicators, Forecasting, Monetary Policy

PurposeThis article aims to analyze if the adoption of inflation targeting in Brazil contributed to an improvement in the conduction of monetary policy capable of increasing credibility and reducing inflation without an increase in the sacrifice rate.Design/methodology/approachConsidering the Brazilian experience, this article estimates, through GMM and VAR methods, the offsetting effects of a monetary policy change on the output‐inflation and unemployment‐inflation trade‐offs.FindingsThe findings denote that the disinflationary process implemented in Brazil, after the adoption of inflation targeting, is not associated with the emergence of the above‐mentioned trade‐offs. Furthermore, the development of credibility in the conduction of monetary policy is an important element responsible for the achievement of this result.Practical implicationsDevelopment of credibility is an important strategy for improving the conduction of the monetary policy.Originality/valueThe results of the paper give some new insights about the conduction of monetary policy for developing countries, which have adopted inflation targeting.

"Inflation targeting is a monetary-policy strategy that is characterized by an announced numerical inflation target, an implementation of monetary policy that gives a major role to an inflation forecast and has been called forecast targeting, and a high degree of transparency and accountability. It was introduced in New Zealand in 1990, has been very successful in terms of stabilizing both inflation and the real economy, and has, as of 2010, been adopted by about 25 industrialized and emerging-market economies. The chapter discusses the history, macroeconomic effects, theory, practice, and future of inflation targeting"--National Bureau of Economic Research web site