Essays on Inflation Dynamics in Selected Asian Countries
Essays on Inflation Dynamics in Selected Asian Countries

Author: Igp Wira Kusuma

Publisher:

Published: 2013

Total Pages:

ISBN-13:

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This thesis analyses inflation dynamics in eight Asian countries. The second chapter analyses inflation persistence and exchange rate pass through (ERPT). The findings on inflation persistence show that for most countries this declines after the Asian financial crisis. The findings for ERPT are more mixed and vary by country. The role of Inflation Targeting Framework (ITF) on inflation persistence and ERPT is also examined. The estimation results suggest it is too early to generalize that ITF exerts a consistently discernible influence on inflation dynamics across this group of Asian ITF countries. The third and fourth chapters focus on the impact that world oil and world food price shocks have on domestic prices. On average, the pass-through of the world oil price is higher than for world food prices. Another finding is that the domestic food supply capacity of a country succeeds in dampening the effect of world food price shocks. The fifth chapter employs disaggregated data on prices to examine inflation dynamics in Indonesia. The main finding is that price behaviour exhibits heterogeneity. Disaggregated prices are more flexible in response to sector specific shocks and are more sluggish in response to macroeconomic shocks. In response to deposit rate shocks, the price puzzle becomes weaker after the full implementation of ITF.

Inflation Dynamics in Asia
Inflation Dynamics in Asia

Author: Ms.Carolina Osorio

Publisher: International Monetary Fund

Published: 2011-11-01

Total Pages: 22

ISBN-13: 1463923961

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The perception that Asia's inflation dynamics is driven by idiosyncratic supply shocks implies, as a corollary, that there is little scope for a policy reaction to a build-up of inflationary pressures. However, Asia's fast growth and integration over the last two decades suggest that the drivers of inflation may have changed, and that domestic demand pressures may now play a larger role than in the past. This paper presents a quantitative analysis of inflation dynamics in Asia using a Global VAR (GVAR) model, which explicitly incorporates the role of regional and global spillovers in driving Asia's inflation. Our results suggest that over the past two decades the main drivers of inflation in Asia have been monetary and supply shocks, but also that, in recent years, the contribution of these shocks has fallen, whereas demand-side pressures have started to emerge as an important contributor to inflation in Asia.

Essays on Exchange Rate and Inflation Dynamics
Essays on Exchange Rate and Inflation Dynamics

Author: Noor Mohammad Uddin

Publisher:

Published: 2018

Total Pages:

ISBN-13:

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"This thesis explores the relationship between the exchange rate and the domestic price level in three essays. The first essay (Chapter 2) examines the causality between the exchange rate and consumer prices, and estimates the extent of the exchange rate pass-through to consumer prices for 12 OECD countries for the period 1974 to 2016. Using the adoption of the Euro and the adoption of the policy of targeting inflation in these countries, which represent changes in the monetary policy regime, I divide this time period into two groups and examine causality and pass-through behaviour separately for each country. Based on a newly developed causality measure for multiple horizons, I found that the direction of causality from consumer prices to exchange rate becomes stronger for the countries with the Euro while the direction of causality from the exchange rate to consumer prices becomes stronger for the inflation targeting countries after their respective regime change. By deriving the impulse response functions from a recursive vector autoregressive model, I found that the exchange rate pass-through to consumer prices is not statistically different from zero for the countries with the Euro while the pass-through is statistically significant in four out of the six remaining countries. Before the regime change, the evidence on both fronts was somewhat mixed among these two sets of countries. The second essay (Chapter 3) examines whether the aggregate price level responds asymmetrically to exchange rate appreciations and depreciations in 12 Asian countries for the period 1994 to 2016. Using a recently developed response-based test, I found evidence of asymmetric responses of the consumer price index to exchange rate appreciations and depreciations in 6 out of the 12 countries. The slope-based test also provides evidence of asymmetry for 6 countries, but the results are the same as the response-based tests only for 4 countries. Further, depreciations are not necessarily passed-through to prices more than the appreciations. The third essay (chapter 4) examines the purchasing power parity (PPP) hypothesis for our selected 12 Asian countries for the period 1974 to 2016. Since stationarity of the real exchange rate implies that PPP holds, I employ unit root tests on the real exchange rate in the presence of multiple structural breaks. Our findings support the PPP hypothesis for six countries. Further, there is no additional evidence of trend stationarity of the series in these countries, so that there is no support for the Harrod-Balassa-Samuelson hypothesis. " --

Money Supply and Inflation Dynamics in the Asia-Pacific Economies
Money Supply and Inflation Dynamics in the Asia-Pacific Economies

Author: Stelios Bekiros

Publisher:

Published: 2017

Total Pages: 12

ISBN-13:

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We examine the relationship between money supply growth and inflation in 3 Asian Economies which are India, Malaysia and Japan using a time-frequency approach. The application of a unified multi-scale analysis allows us to provide a continuous assessment of the link between money supply growth and inflation, unlike most of the existing literature studying this relationship. We also employ a bivariate frequency-domain causality test to determine the nature and direction of interdependence between money supply growth and inflation dynamics. Our findings provide a better understanding of their lead-lag linkages and causal relationship in the selected countries of the Asia-Pacific region.

Inflation in Emerging and Developing Economies
Inflation in Emerging and Developing Economies

Author: Jongrim Ha

Publisher: World Bank Publications

Published: 2019-02-24

Total Pages: 513

ISBN-13: 1464813760

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This is the first comprehensive study in the context of EMDEs that covers, in one consistent framework, the evolution and global and domestic drivers of inflation, the role of expectations, exchange rate pass-through and policy implications. In addition, the report analyzes inflation and monetary policy related challenges in LICs. The report documents three major findings: In First, EMDE disinflation over the past four decades was to a significant degree a result of favorable external developments, pointing to the risk of rising EMDE inflation if global inflation were to increase. In particular, the decline in EMDE inflation has been supported by broad-based global disinflation amid rapid international trade and financial integration and the disruption caused by the global financial crisis. While domestic factors continue to be the main drivers of short-term movements in EMDE inflation, the role of global factors has risen by one-half between the 1970s and the 2000s. On average, global shocks, especially oil price swings and global demand shocks have accounted for more than one-quarter of domestic inflation variatio--and more in countries with stronger global linkages and greater reliance on commodity imports. In LICs, global food and energy price shocks accounted for another 12 percent of core inflation variatio--half more than in advanced economies and one-fifth more than in non-LIC EMDEs. Second, inflation expectations continue to be less well-anchored in EMDEs than in advanced economies, although a move to inflation targeting and better fiscal frameworks has helped strengthen monetary policy credibility. Lower monetary policy credibility and exchange rate flexibility have also been associated with higher pass-through of exchange rate shocks into domestic inflation in the event of global shocks, which have accounted for half of EMDE exchange rate variation. Third, in part because of poorly anchored inflation expectations, the transmission of global commodity price shocks to domestic LIC inflation (combined with unintended consequences of other government policies) can have material implications for poverty: the global food price spikes in 2010-11 tipped roughly 8 million people into poverty.

The Distributional Implications of the Impact of Fuel Price Increases on Inflation
The Distributional Implications of the Impact of Fuel Price Increases on Inflation

Author: Mr. Kangni R Kpodar

Publisher: International Monetary Fund

Published: 2021-11-12

Total Pages: 34

ISBN-13: 1616356154

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This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.

Global Trends 2040
Global Trends 2040

Author: National Intelligence Council

Publisher: Cosimo Reports

Published: 2021-03

Total Pages: 158

ISBN-13: 9781646794973

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"The ongoing COVID-19 pandemic marks the most significant, singular global disruption since World War II, with health, economic, political, and security implications that will ripple for years to come." -Global Trends 2040 (2021) Global Trends 2040-A More Contested World (2021), released by the US National Intelligence Council, is the latest report in its series of reports starting in 1997 about megatrends and the world's future. This report, strongly influenced by the COVID-19 pandemic, paints a bleak picture of the future and describes a contested, fragmented and turbulent world. It specifically discusses the four main trends that will shape tomorrow's world: - Demographics-by 2040, 1.4 billion people will be added mostly in Africa and South Asia. - Economics-increased government debt and concentrated economic power will escalate problems for the poor and middleclass. - Climate-a hotter world will increase water, food, and health insecurity. - Technology-the emergence of new technologies could both solve and cause problems for human life. Students of trends, policymakers, entrepreneurs, academics, journalists and anyone eager for a glimpse into the next decades, will find this report, with colored graphs, essential reading.

The Scope for Inflation Targeting in Developing Countries
The Scope for Inflation Targeting in Developing Countries

Author: Mr.Paul R. Masson

Publisher: International Monetary Fund

Published: 1997-10-01

Total Pages: 54

ISBN-13: 145185515X

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Inflation targeting (IT) serves as monetary policy framework in several advanced economies, where it has enhanced policy transparency and accountability. The paper considers its wider applicability to developing countries. The prerequisites for a successful IT framework are identified as an ability to carry out an independent monetary policy (free of fiscal dominance or commitment to another nominal anchor, like the exchange rate) and a quantitative framework linking policy instruments to inflation. These prerequisites are largely absent among developing countries, though several of them could with some further institutional changes and an overriding commitment to low inflation make use of an IT framework.

Monetary and Currency Policy Management in Asia
Monetary and Currency Policy Management in Asia

Author: Masahiro Kawai

Publisher: Edward Elgar Publishing

Published: 2012-01-01

Total Pages: 321

ISBN-13: 0857933353

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Asian economies strengthened their monetary and currency management after the Asian financial crisis of 19971998, and came through the global financial crisis of 20072009 relatively well. Nevertheless, the recent global crisis has presented new challenges. This book develops recommendations for monetary and currency policy in Asian economies aimed at promoting macroeconomic and financial stability in an environment of global economic shocks and volatile capital flows. Monetary and Currency Policy Management in Asia draws lessons from crises and makes concrete macroeconomic policy recommendations aimed at minimizing the impacts of an economic and financial downturn, and setting the stage for an early return to sustainable growth. The focus is on short-term measures related to the cycle. The three main areas addressed are: monetary policy measures, both conventional and unconventional, to achieve both macroeconomic and financial stability; exchange rate policy and foreign exchange reserve management, including the potential for regional cooperation to stabilize currency movements; and ways to ease the constraints on policy resulting from the so-called 'impossible trinity' of fixed exchange rates, open capital accounts and independent monetary policy. This is one of the first books since the global financial crisis to specifically and comprehensively address the implications of the crisis for monetary and currency policy in emerging market economies, especially in Asia. Presenting a broad menu of policy options for financial reform and regulation, the book will be of great interest to finance experts and policymakers in the region as well as academics and researchers of financial and Asian economics as well as economic development.

Productivity Dynamics in Emerging and Industrialized Countries
Productivity Dynamics in Emerging and Industrialized Countries

Author: Deb Kusum Das

Publisher: Routledge

Published: 2018-04-17

Total Pages: 555

ISBN-13: 135100252X

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The world, of late, has seen a productivity slowdown. Many countries continue to recover from various shocks in the macro business environment, along with structural changes and inward looking policies. In contemporary times of growth slumps, various exits and protectionist regimes, this book engages with the study of productivity dynamics in the emerging and industrialized economies. The essays address the crucial aspects, such as the roles of human capital, investment accounting and datasets, that help understanding of productivity performance of global economy and its several regions. This book will be of interest to academics, practitioners and professionals in the field of economic growth, productivity and development studies. This will also be an important reference on empirical industrial economics in both India and the world.