All Questions
11 questions
1
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1
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68
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Why do central banks want to decrease inflation?
Inflation is a result of increased demand with same supply (in worst case. in best case, supply also increases), due to more money on people's hand. As far as I understand it, inflated market is still ...
- 11
-4
votes
1
answer
149
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Why is there increased speculation that America might go into a recession ? If they do will the rest of the world also face downturn?
Recently there has been increasing speculation regarding USA going into recession (since rate hikes can cause recessions):
https://www.washingtonpost.com/business/2022/05/19/recession-economy-markets/
...
- 153
1
vote
1
answer
397
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Savings = Investment. High interest rates stifle investment. High interest rate encourage savings. Isn't this a contradiction?
If savings = investment, then by definition, higher interest rates encourage savings and hence more investment. But when it comes to monetary policy, central banks increase interest rates in order to ...
- 405
0
votes
1
answer
578
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Did Capitalism and Adam Smith Support a Central Bank?
Does Adam Smith and Capitalism support a Central Bank/Federal Reserve?
I am trying to read through the book "Wealth of Nations" to understand. Having a central/regulatory figure dictate ...
- 97
3
votes
1
answer
44
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Data on inflation target on different countries around the world
Does someone know if there's a page, like a "global bank" online page, where one could see the inflation target for different countries?
For example, in x country, for x' year, the inflation ...
- 215
4
votes
1
answer
136
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How buying bonds indirectly from the government prevents the central bank from financing government deficit?
From Krugman's macroeconomic textbook (highlighting is mine):
"In an open-market operation the Federal Reserve buys or sells some of
the exist- ing stock of U.S. Treasury bills, normally through ...
- 1,135
0
votes
2
answers
1k
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Question on Central bank loss function interpretation
How do you interpret this central bank’s loss function:
$$L(\hat x, \pi)=\alpha \hat{x}^2+(\pi-\pi^T)^2$$
where $\alpha >0$ and $\hat x$ is output gap.
Phillips curve is $\pi = \theta \hat{x}+\...
- 192
5
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4
answers
11k
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Why does the European Central Bank use the 5y5y rate to measure inflation
I cannot understand why the 5y5y swap rate measures inflation. I can see how the floating rate somewhat measures the rate of interest rates which are related to inflation. However I cannot understand ...
- 649
6
votes
7
answers
2k
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Why didn't the money printing by the US Federal Reserve since 2008 lead to inflation?
http://www.telegraph.co.uk/finance/comment/liamhalligan/8484530/Americas-reckless-money-printing-could-put-the-world-back-into-crisis.html
America's reckless money-printing could put the world back ...
- 545
7
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1
answer
185
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Differing Inflation Rates for Separate Income Groups; Literature?
So here's a few ideas that have been floating around my head since undergraduate university. It seems that money owned by the highest net wealth owners is always moving around and making a return, but ...
- 6,678
3
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1
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134
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Central Banks and Price Stability
Are there any empirical studies on the question of whether independent central banks cause price stability?
I am seeking to understand if independence (of the central monitory authority) is part of ...
- 336