Stack Exchange Network

Stack Exchange network consists of 174 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers.

Visit Stack Exchange

Questions tagged [inflation]

the generalized increase of prices in an economy, or the increase of the price level over time

-1
votes
0answers
6 views

Why is India's inflation so high compared to other BRICS countries?

Please discuss the key reasons or do a comparative analysis.
1
vote
4answers
54 views

How does printing money cause inflation?

I've had this doubt for a long time and I still can't find a proper answer to it. Most answers I get just partially explain the phenomenon of a general increase in price level. I want to understand ...
0
votes
2answers
45 views

Money supply generation in a long run [on hold]

Suppose, for simplicity, we have US with zero national debt, constant positive inflation rate, fed rate, and gdp something about 2% for, let's say, 100 years, with no bubbles and other news. To ...
17
votes
9answers
9k views

Car prices haven't changed in 20 years, no inflation?

I notice that there seems to be little or no change in car prices over the last 20 years and they seem to be unaffected by inflation. For example, a Toyota Camry sold for about \$23,000 +/- \$2,000 (...
1
vote
1answer
29 views

Cost-push inflation and labour shortage

Is it possible for there to be a shortage of labour in an economy when there is cost-push inflation?
1
vote
2answers
20 views

Crude oil price changing factors

I tried to summarize my thoughts about oil price changes, and try to understand the next weeks. Will decrease price: OPEC output is higher every month, increasing supply. interest rates goes up, ...
-1
votes
2answers
49 views

How inflationary is progressive taxation?

Compared with, say minimum wage increases, how inflationary is progressive taxation?
0
votes
1answer
23 views

tariffs and inflation

tariffs lead to inflation; is this the same as inflation from supply constraints or demand drive, given that the tariff is removed from the money supply? How should the fed be thinking about this in ...
0
votes
1answer
54 views

Why would higher expected inflation increase corporate earnings and dividends' rate of increase?

A Random Walk Down Wall Street (2015 11 ed). p. 125. Determinant 4: The level of market interest rates. The stock market does not exist as a world unto itself. Investors should consider how much ...
0
votes
2answers
64 views

Why can an increase in inflation rate, increase interest rates?

A Random Walk Down Wall Street (2015 11 ed). pp. 224 Bottom - 225 Top.   Changes in the rate of inflation will similarly tend to have a systematic influence on the returns from common stocks. This ...
1
vote
0answers
60 views

How would a “one-way” fixed exchange rate backed by destroying foreign currency work?

Note: This question may seem really pointless, but it's actually in the context of a cryptocurrency idea I am developing, but I posed it this way as the question is not really about cryptocurrencies ...
0
votes
0answers
9 views

Are there any products, assests, or services that have matched inflation?

If something costs 1 dollar 50 years go, and now due to inflation, the USD has doubled, and the product now costs 2 dollars. Is there any product, service, or asset, that very closely matches ...
-1
votes
3answers
57 views

What's a product that historically has always had the same value, and probably will in the future?

Money usually has inflation tied to it, but is there a product that has stayed around the same value world wide for a very long time, and probably will for a very long time as well (something like 100 ...
1
vote
0answers
17 views

Can the CPIH be used to find the real terms rise in price of a component of the basket of goods?

I want to calculate the real terms rise in UK private rent prices since 2011 using the CPIH measure. The indexes of nominal rent prices and the CPIH rose by 14.7% and 13.5% respectively, so I can say ...
1
vote
2answers
60 views

Simplest model of an economy exhibiting (hyper)inflation

I would like to find a minimal mathematical model for describing financial crises of the type that produces hyperinflation. Here's a naive attempt, just to give the idea of what I'm thinking of. ...
0
votes
0answers
22 views

Higher wages and lower prices?

I am reading an article about inflation where the author argues that defining inflation in terms of price level is too broad since if we do that then an anti-inflation policy would be a policy that ...
3
votes
0answers
27 views

Are there empirical studies that quantify shoe-leather or menu costs?

Two theoretical arguments why a high level of inflation is bad (e.g. for growth) are: shoe-leather cost: keeping lower money balances when inflation is high (implying more frequent trips to the bank/...
1
vote
4answers
122 views

What is the point of a constant (thus known) inflation rate?

I have read somewhere (attributed to Milton Friedman) that a good practice of monetary policy is to maintain a constant inflation rate (of 3% per annum, say). What is the point of that? If everyone ...
0
votes
0answers
18 views

Neoclassical Convergence Hypothesis in the Euro Area

The Neoclassical Convergence Hypthesis states that current account deficits should not be viewed as problematic, because they are a sign of functioning financial markets and higher income growth in ...
1
vote
0answers
19 views

Does accumulation of fiat currency cause instability?

If the value of fiat currency is a function of the supply of money and it's velocity, is the accumulation of that currency detrimental to its stability? I may be wrong in my understanding of the ...
0
votes
1answer
31 views

Why do central banks print money? [duplicate]

If a country's central bank prints money, it causes inflation. However, apparently, small amounts of inflation is a good thing. Why is the case? What would happen if central banks stopped printing ...
1
vote
1answer
21 views

Daily variable for inflation

I was wondering if there is a way to account for daily inflation data. I have daily short-term interest rates, and I would like to convert them to real short-term interest rates. Can I just average ...
1
vote
2answers
76 views

How is currency depreciation related to import tariffs?

In the news today they were talking about how the US is "threatening to increase proposed tariffs on Chinese imports from 10 percent to 25 percent." One of the reasons they gave for this was that ...
0
votes
1answer
108 views

Inflation, Monetarism and Keynesianism

Is there a strict division between the Keynesianism and Monetarism on the view of inflation. In other words, does the push and pull inflation only belong within a Keynesian framework and does ...
0
votes
2answers
64 views

Is inflation a lack of production?

If every person in America was given a million dollars what fundamentally changes that causes prices to rise? Intuitively I was thinking that this is simply a production problem. With more money there ...
0
votes
1answer
17 views

Devising a model for inflation for a closed points system

I am working on a project that involves points. The idea is that users will earn points and redeem them for certain rewards. The means via which the users earn are fairly limited (They can attend a ...
1
vote
2answers
46 views

Should mean wages increase with inflation?

Should mean wages increase with inflation? If not, why? Has this profound consequences in the redistribution of wealth? (not an expert in economics...I apologise is the question is too naif)
2
votes
0answers
34 views

Roosevelt’s Price Fixing in The Great Depression

Why didn’t Roosevelt’s method of fixing prices on labour and produce help the depression? If everyone was receiving a wage that allowed them to afford produce, wouldn’t that create a new equilibrium ...
0
votes
1answer
20 views

How does hyperinflation affect investment?

Title says it all - how does hyperinflation affect investment and how does this differ from how creeping inflation might affect investment?
0
votes
1answer
66 views

Expectation augmented Phillips Curve

Currently studying Intro to Macroeconomics, and faced Expectations augmented PC. In my textbook it is not clear how expected inflation affects unemployment. My view so far, is that expected inflation ...
5
votes
1answer
81 views

Why, in such a debt-heavy era, is inflation still such a Bad Thing(TM)?

Going through the Wikipedia article on inflation, a number of pros and cons to inflation are covered. Most of the "cons" of inflation (cost-push inflation, hoarding, hyperinflation, diminished ...
1
vote
0answers
40 views

In the UK, does the rate of annual price increases in food consistently beat inflation? How can we tell?

Informally, I've often seen it claimed that the price of food always goes up. Certainly, I do notice when the price of my £5 food bag goes up 50p or when my £1 milk goes up 20p. Yet, whenever I've ...
1
vote
0answers
44 views

Could the inflation following the Gold Rush have been avoided, are we any “wiser” on inflation now?

Quoting Milton Friedman on the inflationary period shortly following the American Gold Rush in California: "Because there was more gold, they had to pay a little more gold to buy goods and ...
1
vote
1answer
86 views

Which economical consequences could happen to a country if it forbiddes importing cars?

My country has major economical headaches each 10 years or so, like hyperinflation or defaults or things like that. It's been 17 years since the last major crisis (a larger crisis than the 1930's ...
0
votes
1answer
70 views

What really is inflation?

I understand that you measure inflation by first measuring what the average person buys. Then you compare the total cost of these goods in year x with year y to get the inflation (from x to y). The ...
1
vote
1answer
97 views

Can increase of NEER cause higher inflation?

I´m trying to find siutable econometrics model for explaining inflation during financial crisis and after. My final model shows that if NEERnominal effective exchange rate) increases, the inflation ...
0
votes
0answers
13 views

Interpretation of a case in which There is a significant difference between consumer price index and GDP deflator?

We know the both GDP deflator and consumer price index are often used for measuring inflation. Now my question is how a case in which there is a significant difference between them be justified? My ...
0
votes
1answer
36 views

Fiscal budget: spending in real vs nominal terms

What does it mean in the context of a budget to “freeze spending in real terms”? And how would this differ from freezing spending in “nominal terms”? I am looking to understand how this would be ...
0
votes
1answer
23 views

Interrelationship between inflation and foreign capital flow

For the below let's assume domestic currency is ₹ and foreign capital is in \$ Foreign Capital Inflow => ₹ Appreciates (Because of more \$) But consider this, Foreign Capital Inflow => More ₹ in ...
1
vote
1answer
36 views

Does lowering consumption help reduce inflation rates?

My country has a whopping 25% annual inflation rate. As far as I know, high inflation implies higher consumption rates, but I was hearing lately that consumption is actually lowering, while inflation ...
0
votes
1answer
18 views

Interpretation of price indices

How can cpi 3.41 and Wpi 3.54 be interpreted? I know that cpi gives the inflation rate but what is it that we understand from these figures?
4
votes
2answers
43 views

Firm Concentration and Low Inflation

Inflation in the advanced economies since the financial crisis has been surprisingly low. Yet at the same time we’re told that the US economy is losing its dynamism in recent decades. This is ...
3
votes
0answers
61 views

Does Economic Growth Lead to Inflation?

As an answer to this question, it was stated that Economists believe that higher growth rates tend to also mean higher inflation rates. As a non macro-economist, I am wondering if this is true? ...
1
vote
1answer
42 views

What does “to be in the double digits to get inflation” mean?

Until last year, the Chinese government set 8 percent annual growth as a goal, and the economy frequently delivered several percentage points more than that. Then last March, the government pared ...
0
votes
1answer
29 views

Disruption vs economic growth vs inflation

On the terms: Disruption is when new players earn say 1m but take over of a 100m market segment, causing damage to well established but less innovative businesses economic growth is what we read ...
1
vote
0answers
18 views

Why does US jobs and inflation have an affect on European equities?

There are articles such as 'European shares crawl higher as investors eye US inflation data'. Is this just put down to Americans may have more money to spend overseas so investors speculate higher ...
3
votes
1answer
502 views

Confusion about the effect of an increased expected inflation on the price level

In Mankiw's Macroeconomics 7th edition, on page 99, there is the following equation, which states that "the price level depends not only on today’s money supply but also on the money supply expected ...
0
votes
0answers
21 views

How does increase in repo rate arrest inflation? How does price of goods come down?

When the repo rate is increased, how does it reduce demand? What happens to supply on reduction in demand? Why can't the people spend the money, even when(suppose) they have no transaction with banks?
1
vote
1answer
25 views

Prices on year by year basis

I want to know the cost of milk on a year by year basis, say for the last 10 or 20 years. similarly I may want to know price of other items also (petrol, rice, biryani, etc). I just need the average ...
0
votes
1answer
57 views

Did I calculate maximum price of machine correctly?

Problem: A firm wants to buy a machine for its factory. It will work for two years. During the first year it will yield 240 thousand roubles and during the second year it will yield 200 thousands ...