Questions tagged [inflation]

Inflation is generalized increase of prices of goods and services in an economy, along with a corresponding fall in the purchasing value of money. The rate of inflation refers to the increase of the price of goods and services over time.

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Short-term real velocity growth types

Isn’t real growth per capita in all but housing square footage consumption and/or investment still inflation?
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Does anyone have any references relating to supermarkets pricing goods to keep CPI down?

On BBC Radio 4's Today programme during the Business News on the 31st August 22, I heard an ex-buyer for a major UK supermarket saying that they always kept a list of CPI goods and they made sure that ...
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Does inflation affect debt-to-gdp ratio?

So consider this indicator https://fred.stlouisfed.org/series/GFDEGDQ188S I am wondering since Debt is nominal and GDP is also nominal, is it possible for inflation to have an effect on this ratio? I'...
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Is inflation the cause or just the consequence? [closed]

Inflation is usually referred as an issue to the economy and we analyze its consequences on income and economic growth. My undestanding however is that the real issue is the negative shift in ...
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Simple DCF model with inflation and taxes - Why do inflation and taxes only matter jointly?

I'm putting together a simple discounted cashflow (DCF) model for a theoretical real estate investment. I think the model is correct, but I can't understand some of the results. The model is simply: $...
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How does FDI from one country affect the inflation outlook of another?

How do the relations between FDI and inflation work in the current world? (Mainly looking at the relationship between Canada and its FDIs from the EU and China.) Context and my thoughts: I've been ...
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Inflation, competition, and efficiency

I recently watched an interview with a reporter who looked through recent public quarterly filings and found that production costs were increasing and these were being passed on to consumers but that ...
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Are interest rates increases fighting inflation?

Central banks are stubbornly increasing rates to fight current spike of inflation. Inflation, especially in Europe but also in the USA, is mainly supply driven and, killing demand to try to tame an ...
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Why the subjective "Owners’ equivalent rent of residences" is included in the CPI?

I was reading about the calculation of the Shelter index of the CPI which accounts to more than 30% of the entire basket. It consists mainly of two parts: (1) Rent of primary residence, and (2) Owners’...
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Can there be profit-price spirals, or others?

Wikipedia describes: In macroeconomics, a wage-price spiral ... is a proposed explanation for inflation, in which wage increases cause price increases which in turn cause wage increases, in a ...
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How can Japan have much lower inflation compared to US when Yen is much weaker compared to USD than 1 year ago?

I understand that Japanese people might not buy same stuff that US people buy, that inflation might be calculated differently, that people in Japan can buy services/products made inside Japan... and ...
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Relationship between nominal and real interest rates and inflation in a term structure model

I am studying the basics of the term structure of interest rates from Hillier et al. "Fundamentals of Corporate Finance" (3rd ed., 2017) (here is a link to a slightly different edition). An ...
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Impact of China and European Union on Canadian Inflation

I'm currently working on a project where I'm trying to determine the impact of the European Union and China on the Canadian economy, specifically, the inflation and policy rates for the next 2-3 years....
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United States - Is it the case that cost-push inflation is debunked?

While cost-push inflation makes intuitive sense for explaining the inflation uptrend in recent years: disruptions to the supply chain and volatile energy markets lead companies to pass on price hikes ...
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why is the slow down in economic growth creating inflation

Context: Currently, many central banks and authorities are implementing monetary policies to do monetary tightening in response to current inflation and expectations of even higher inflation in the ...
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Relative Importance Weights of USA CPI items

So for example in this release Table 2. Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category, the Relative importance weights are stated. Now I ...
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What is the effect on shelter costs of raising interest rates?

In the UK, a rise in rates causes a rise in mortgage repayments. It can lead to landlords raising rents due to margin pressure, if their mortgage is not fixed or is close to the end of its fixed ...
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Can we predict the inflation rate in India for the next 20 years?

Can we predict the inflation rate in India for the next 20 years? Like inflation rate in 2022, 2023, 2024... and so on.
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In the simple Keynesian model, is full employment of resources really desirable?

In almost every introductory macro economics class, while studying the simple Keynesian model, students are always taught that everyone in the economy always works to achieve full employment of ...
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Year:Location Inflation / CoL calculator?

Is there a calculator or standard method of computation where you could get the relative difference in spending power of X USD in a given city/year from a given city/year? For example, what would be ...
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Central bank use of interest to combat inflation

I continue being puzzled by the interest rate rises being used as a lever to lower inflation in the present climate. If I understand correctly, the rationale of higher interest is to dampen demand ...
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What does THO, as in "USD THO", stand for in export statistics?

I've noticed that some online sources use "USD THO" as a unit to express rates of transfer of value. Specifically, I saw it in measuring Chinese exports to Russia in this video at 21:20 ...
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How to calculate real commodity prices from nominal time series

I am trying to adjust a time series of nominal prices of a commodity to inflation, using a given year as base year, i.e. calculating 'real' prices. What is the most common/correct approach for doing ...
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Why is inflation higher in emerging economies?

Inflation rates are higher in emerging economies than in developed economies. (source) Why is that so ? Most explanations I have found refer to some kind of catching up, but it does not immediately ...
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Alternate formulas with NonEquivalent Averages to judge an ending quarter of one season (It's my post from StackMath.)

What would be economic aspects which are economically reasonable have you found from my post here ? i.e. Nash equilibrium (based on theory of "about a quarter of its matches end in draws"), ...
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If developed countries go through an economic depression, what happens to developing & underdeveloped countries?

With the historical inflation data throughout 2022 from the US & England, also with the hawkish view from the Federal Reserve, Bank of England & other analysts of the possibility of an ...
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Is it silly and why is it silly to automatically set the Federal Funds Rate to be a fixed math function of recent CPI, PPI etc?

Is it silly and why is it silly to automatically set the Federal Funds Rate to be a mathematical function of recent CPI, PPI etc? (Or other macroeconomics data). As a silly and simple example, if CPI ...
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How often is the rent increased for apartments in Argentina?

This is a chart of the inflation rate in Argentina... The experience in 2003 would probably make real estate owners wary of contracts that fix rent for long periods of time. The recent experience ...
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Is there alternative to the monetary tighetning when the inflation is caused by scarcity (supply-side shocks)?

Current economic crisis is created by sharp reducing shocks to the supply side - bad economic weather, political restrictions to the trade, service availability reduction in the transportation sector. ...
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Hybrid New Keynesian philips curve model - inflation expectation

I am doing research on the HNKPC model following Gali and Gertler 1999 as per the picture. I do not understand how to get the inflation expectations. Could I get more insight on how to perform this ...
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Bernanke - Keynesian vs monetary viewpoint across time

This is more of a conceptual/intuition question as it relates to our understanding of money supply. Bernanke gave a speech to answer the many questions he got pertaining to QE and its impact on ...
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Do we have an authoritative reason why inflation is bad?

We all know high inflation is bad. Bad things happen. However: Do we have an authoritative source explaining why inflation is bad and should be prevented? Has anyone pinpointed the main root cause or ...
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Given a large increase in the price of an essential good, can suitable monetary policy keep average inflation very low?

Suppose there is a very large increase in the world price of an important good which is essential for many people, such as the increase in price of natural gas over the last year or so. Considering ...
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Is high inflation an indication of a recession, either now or in the near future?

I have been wondering about this. Perhaps one example of a recession without inflation would settle this quicky?
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Is it correct to distinguish between "monetary" and "price" inflation?

As the questions says. Should we distinguish between both. Or are they the same thing?
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How to measure supply constraints/bottlenecks

A common explanation for the recent global surge in inflation points to supply constraints and bottlenecks in delivery chains. While I find the argument appealing, I have seen little quantitative ...
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Why is the Correlation between Interest Rates and Inflation positive?

I regressed quarterly CPI on lagged quarterly (from 1 to 8 quarters) 10-year Treasuries, and found that with data from roughly 1990, the coefficient of the lagged rates tends to be positive. This ...
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Why have gas prices gone up so much recently? [duplicate]

Gas prices are soaring. Russia cant have this much influence on the world economy, or can it? Maybe it is due to a post COVID recession?
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Are interest rate hikes regressive?

Central banks are currently hiking interest rates to reduce aggregate demand. How is this reduction in spending distributed across the population? Specifically, what would be the shape of a graph of ...
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What would happen if someone suddenly gained 1 Trillion $?

I was wondering, if I was suddenly worth 1 Trillion $, say a sudden bank glitch gave me the money, and nobody noticed, what would happen I suppose massive inflation would make the dollar worthless, ...
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Is there a progressive response to inflation?

The conventional response to inflation is to increase central bank interest rates. This seems regressive. Is there a progressive method to stop inflation? In concrete terms, central bank interest rate ...
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Can inflation in a context of fixed production of good and services be calculated?

According to, Money and inflation To summarize, the money supply is important because if the money supply grows at a faster rate than the economy's ability to produce goods and services, then ...
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Do foreign donations raise inflation?

This is a hypothetical scenario that I have been thinking about for a while. I have been reading about it, but I can not come up with a definitive answer. If USA decides to donate 10b USD yearly for 5 ...
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Value added at current price and deflation

I am currently working with Value Added at current price per industry per country per year (VALU variable available on OECD stats) and I'm trying to use the Value Added for all the European Countries (...
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How will more stimulus checks in California affect inflation?

So we're getting more money here in California. I thought the consensus at this point was that we probably overstimulated the economy. What gives? What was the reasoning economic advisors had for ...
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How do public debt and inflation correlate?

From my naive viewpoint, I would argue that public debt correlates positively with inflation. One cause could be that states with high public debts often use "their" reserve bank (e.g. the ...
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Is is possible that two economies have the same real interest rate, same GDP growth, but different inflations?

This is just a conceptual thought experiment. Is it possible that two countries have the same real interest rate, same GDP growth, but different inflation, one higher, one lower? If that's possible, ...
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Is Khan Academy wrong about inflation?

In Khan Academy's macroeconomics course, they present the following short story: One morning, everyone in the Land of Funny Money awakened to find that the monetary value of everything had increased ...
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Can a recession caused by drastic increases in the official interest rates be good for the economy in the long run?

Most of you are probably aware that a lot of the countries are increasing their official interest rates in order to fight inflation. Interest is an expense for the companies and individuals, thus an ...
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How much of gas prices can be tied to refinery profit margins?

US President Biden wrote a letter (widely reported, but I can't find an official' copy; see here for full text) blaming fat refinery profit margins for the recent (January-June) rise in gasoline ...
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