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Inflation   Editor: Dr. Róbinson Rojas Sandford
Róbinson Rojas - 1994
Inflation - definition and measurement
...if supply responds fairly soon, maintaining an upward slopping supply curve, then price per unit of output will increase, but so output will increase, which will lead to more employment (less unemployment) in the short- and medium-term. In this situation, there will be 'trade-off' between unemployment and inflation. This situation is called "output inflation". Keynesians take that this is the most common status of the national economy, and it does happen in the stage of recovery (boom) in the business cycle...

Inflation and Financial Development: Evidence from Brazil
Manoel Bittencourt - 2008
We examine the impact of inflation on financial development in Brazil and the data available permit us to cover the period between 1985 and 2002. The results - based initially on time-series and then on panel time-series data and analysis, and robust for different estimators and financial development measures - suggest that inflation presented deleterious effects on financial development at the time. The main implication of the results is that poor macroeconomic performance has detrimental effects to financial development, a variable that is important for affecting, for example, economic growth and income inequality. Therefore, low and stable inflation, and all that it encompasses, is a necessary first step to achieve a deeper and more active financial sector with all its attached benefits.

Argentina’s Monetary and Exchange Rate Policies after the Convertibility Regime Collapse
April 2007, Roberto Frenkel and Martín Rapetti
This paper offers a comprehensive look at how Argentina managed a remarkable economic recovery from its collapse in 2001. The authors show how the Argentine government's policy of targeting a stable and competitive real exchange rate was crucial to the country's economic recovery. They also analyze the various sources of aggregate demand and government revenue in different phases of the expansion. In addition to the crucial role of the exchange rate, the authors look at other policies — such as an export tax, capital controls, and the default on much of the country's sovereign debt — which were met with disapproval by many economists and other commentators but played an important role in the recovery.

Event at CEPR:
Inflation Targeting, Employment Creation, and Economic Development
May 17 and May 18, 2006 Washington, D.C.
"Inflation targeting" has become the operational objective for many central banks around the world.  By one recent count, twenty-three countries had adopted formal inflation targeting as of 2006 and more are on the way. 
This almost single minded concern with inflation, however, leaves many important questions unanswered: Is inflation targeting really the best framework for developing country central banks to adopt even if they face relatively low rates of employment generation together with a high rate of poverty incidence? What are the concrete alternatives to inflation targeting and how would they operate under the constraints and conditionalities of a globalized world economy characterized by high finance capital mobility?

The Bank of England
Inflation Report By Date:
How to Obtain
Numerical Parameters of Inflation Report Distribution
2007  2006  2005  2004  2003  2002  2001  2000  1999  
1998  1997
Released in 2008
May 2008
Download PDF | Read Opening Remarks | Download in sections | Read overview | Charts and Tables | Watch Webcast

Read Press Conference Transcript
February 2008
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Charts and Tables
| Watch Webcast
Read Press Conference Transcript

Inflation and Deflation
Inflation is one of the most important variables in economics, as its impact is felt on everything from mortgage rates to union-management contract negotiations

CEPR on inflation in the US

Inflation Could Pose a Problem for Housing Recovery
May 21, 2008 - By Dean Baker
Prices in the bottom third of the market have fallen more sharply than the market average. In spite of the sharp jump in the price of oil and other commodities, the core inflation rate has remained relatively mild at both the consumer level and the finished goods level in the Producer Price Index (PPI). This may be changing. The April PPI report released yesterday showed the core finished goods index rising by 0.4 percent. It has now risen at a 5.0 percent annual rate over the last quarter. There is much more inflation in the pipeline, with the core intermediate goods index rising 1.2 percent in April, brining the annual inflation rate in the core index to 12.4 percent over the last quarter.
CPI Inflation Remains Tame in April
By Dean Baker - May 14 2008
Since January, medical care costs have risen at a 1.2 percent rate, while jobs have grown at a 3.1 percent rate. Retail inflation remained mild in April as the overall CPI increased by 0.2 percent, while core inflation rose by just 0.1 percent. The annual rate over the last three months in the overall CPI has been 2.3 percent, down from 3.9 percent over the last year. The annual rate in the core has been just 1.2 percent over the last three months, down from a 2.3 percent rate over the last year.
Lower Health and Housing Inflation Leave Overall and Core CPI Flat in February
March 14, 2008 - By Dean Baker
Higher import prices and weak productivity growth are likely to lead to higher inflation. The overall CPI was unchanged in February as a 0.5 percent drop in energy prices offset a 0.4 percent rise in food prices. The core index was also flat as inflation moderated in several areas and apparel and car prices fell for the month. Over the last three months the overall CPI has risen at a 3.1 percent annual rate, down from a 4.0 percent rise over the last year. The core rate has risen at a 2.3 percent annual rate over the last three months, the same as its rate over the last year.
While the inflation news is encouraging, it is likely that this report is somewhat of an anomaly. Last month, inflation in both the core and overall CPI was higher than expected. It is likely that more price increases were picked up in the data in January and therefore the price rises were less than might otherwise have been the case for February.
Housing Continues to Hold Down Core Inflation in June
July 18, 2007 - By Dean Baker
The core CPI, excluding owner occupied housing, rose at a 2.5 percent rate in the quarter. The overall CPI rose by 0.2 percent in June, bringing the annual inflation rate over the last quarter to 5.2 percent. This is up from a 2.7 percent rate over the last year, and considerably higher than the 4.0 percent rate of wage increase over the quarter. The core index also rose by 0.2 percent in June, as a 0.5 percent jump in food prices was offset by a 0.5 percent decline in energy prices. The core index has risen at a 2.3 percent rate over the last quarter, almost identical to the 2.2 percent rate over the last year.
One of the biggest factors helping to contain core inflation has been the weakness of the housing market.
Food and Energy Prices Cause High Inflation in April
By Dean Baker - May 15, 2007
Wage growth is lagging far behind inflation. A 0.4 percent rise in food prices, coupled with a 2.4 percent jump in energy prices, pushed the CPI up by 0.4 percent in April. This brings the annual rate of increase over the last three months to 5.7 percent, approximately 2 percentage points above the rate of wage growth over this period. The core inflation rate was just 0.2 percent, held down by falling apparel prices and slower rental inflation. The core inflation rate for the last three months has been just 1.9 percent, down slightly from its 2.3 percent rate over the last year.
Jump in Medical Costs Pushes Core Inflation Higher
February 21, 2007 - By Dean Baker
A glut of vacant units is holding down rents. An extraordinary 0.8 percent jump in medical care costs led to a higher than expected 0.3 percent core inflation rate in January. The overall inflation rate for January was 0.2 percent, as a 1.5 percent fall in energy prices more than offset a 0.7 percent increase in food prices in January. The annual inflation rate in the core over the last three months has been 2.0 percent, down from a 2.7 percent rate over the last year. The overall inflation rate has been 2.7 percent over the last three months, up from 2.1 percent over the last year. The jump in medical care costs reported for January will not be repeated, but it suggests that the moderation in medical care inflation reported in prior months’ price data was an anomaly.
Falling Car and Airfare Prices Leave Core Inflation Unchanged
By Dean Baker - December 15, 2006
Car prices shaved 0.6pp off the core inflation rate in the last three months. Both the overall and core (excluding food and energy) consumer price indices were unchanged in November. The consensus forecast was that both indices would show a 0.2 percent increase. The overall CPI has now fallen at a 3.9 percent annual rate in the last three months, compared to an increase of 2.0 percent over the last year. The core CPI has risen at a 1.6 percent annual rate over the last three months, down from a 2.6 percent rate over the last year.
Zero-Inflation Madness: Going for Broke
By Mark Weisbrot - July 24, 1997, Minneapolis Star Tribune
There's something a little twisted about a gathering of central bankers over the Labor Day weekend, where they argue about how to worsen the already insecure situation of working people.
No smoked-filled rooms for these guys. With their allies in the economics profession and among financial analysts, they met under the broad expanse of Western skies at Jackson Hole, Wyoming to discuss their theories. And no conspiracies, either: they blab freely to the press. Sounds exaggerated? Take Martin Feldstein, former chief economist under President Reagan and an economic adviser to the Dole campaign. He argued at the conference that the Fed could reduce inflation by another two percentage points, by causing a recession that would cut output by five percent. Never mind the millions of people who would lose their jobs in such a move. His only lament is that "There is no political support for that now."

Fenetre sur l'Europe
Fenêtre sur l’Europe est une association à but non lucratif (loi d’association de 1908). Elle a pour objectif de contribuer à informer sur l'Europe, un maximum de citoyens. est un portail d'information multimédia sur l'actualité européenne.


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