Search

Global supply chain disruptions following the onset of the COVID-19 pandemic contributed to the rapid rise in U.S. inflation over the past two years. Evidence suggests that supply chain pressures pushed up the cost of inputs for goods production and the public's expectations of higher future prices. These factors accounted for about 60% of the surge in U.S. inflation beginning in early 2021. Supply chain pressures began easing substantially in mid-2022, contributing to the slowdown in inflation. [ABSTRACT FROM AUTHOR]

The article examines the effectiveness of monetary policy tightening for reducing rent inflation. It mentions that cost of housing as an important component of total U.S. consumer spending, along with explores that high rent inflation has contributed to elevated levels of overall inflation. It discusses how changes in housing demand can drive both rents and house prices.

The United States has implemented large-scale fiscal policy measures to help households and businesses cushion the economic fallout from the COVID-19 pandemic and to strengthen the recovery. The Federal Reserve has also supported the economy by keeping its policy rate at the zero lower bound. Evidence from Japan suggests that, in a sustained zero-bound environment, an unexpected increase in government spending has much larger and more persistent effects on real GDP, and even more so when the economy is in a recession. [ABSTRACT FROM AUTHOR]

Surges of foreign investment into developing countries can amplify economic stress and potentially undermine their financial stability. New evidence suggests that excessive foreign capital inflows can also increase income inequality in emerging economies. Research shows that, as low global interest rates trigger more investment, those inflow surges benefit entrepreneurs by raising their returns, while lowering household earnings on bank deposits within the countries. The potential impact on income inequality provides another reason beyond financial stability for resisting abrupt surges in capital inflows. [ABSTRACT FROM AUTHOR]

The outbreak of the novel coronavirus, or COVID-19, has severely disrupted economic activity through various supply and demand channels. The pandemic can also have pervasive economic impact by raising uncertainty. In the past, sudden and outsized spikes in uncertainty have led to large and protracted increases in unemployment and declines in inflation. These effects are similar to those resulting from declines in aggregate demand. Monetary policy accommodation, such as interest rate cuts, can help cushion the economy from such uncertainty shocks. [ABSTRACT FROM AUTHOR]

How much impact have price markups for goods and services had on the recent surge and the subsequent decline of inflation? Since 2021, markups have risen substantially in a few industries such as motor vehicles and petroleum. However, aggregate markups--which are more relevant for overall inflation--have generally remained flat, in line with previous economic recoveries over the past three decades. These patterns suggest that markup fluctuations have not been a main driver of the ups and downs of inflation during the post-pandemic recovery. [ABSTRACT FROM AUTHOR]

The portion of national income that goes to workers, known as the labor share, has fallen substantially over the past 20 years. Even with strong employment growth in recent years, the labor share has remained at historically low levels. Automation has been an important driving factor. While it has increased labor productivity, the threat of automation has also weakened workers' bargaining power in wage negotiations and led to stagnant wage growth. Analysis suggests that automation contributed substantially to the decline in the labor share. [ABSTRACT FROM AUTHOR]

The article evaluates the reliability of gross domestic product (GDP) relative to two alternatives, gross domestic income (GDI) and a combination of the two known as GDPplus, for measuring economic output. Topics include the relative weakness of GDI growth in recent years does not necessarily indicate weakness in overall economic growth, and some combination of GDP and GDI, should be used to evaluate the levels and growth rate of economic activity.

The article focuses on role of the People's Bank of China (PBOC) to adjust its required reserve ratio frequently to stabilize domestic economy of China. It mentions that state-owned enterprises (SOEs) enjoy access to bank credit because of implicit and explicit government guarantees on their debt. It also discusses the interest rate policy that is effective for stabilizing fluctuations in inflation and real gross domestic product (GDP).

During the recovery from the Great Recession, real interest rates on government securities have stayed low, but real returns on capital have rebounded. Although this divergence is puzzling in light of standard economic theory, it can be explained by credit market imperfections that raise the cost of capital and depress aggregate investment. The unusually slow credit market recovery is likely to have contributed to the diverging paths of the risk-free rate and returns on capital. It may have also contributed to a slow recovery in investment and output. [ABSTRACT FROM AUTHOR]

The recent slowdown in China's growth has caused concern about its long-term growth prospects. Evidence suggests that, before 2008, China's growth miracle was driven primarily by productivity improvement following economic policy reforms. Since 2008, however, growth has become more dependent on investment and overall growth has slowed. If the recent reform plans can successfully address the country's structural imbalances, China could maintain a solid growth rate that might help smooth its transition to high-income status. [ABSTRACT FROM AUTHOR]

The article provides technical appendix on the methodology used in computing the correlations between demography and equity values in economic research. Statistical results, methods and data sources of the population data and projections for group of seven countries and Korea and China are also presented.

China's household saving rate has risen substantially during the past two decades. Research suggests that increased job uncertainty following reforms and massive layoffs in state-owned enterprises during the late 1990s contributed significantly to the increase. Facing higher unemployment risks after the reforms, workers in state-owned enterprises have tended to save more as a precaution. A recent study estimates that precautionary saving driven by the reforms explains about a third of Chinese urban household wealth accumulation from 1995 to 2002. [ABSTRACT FROM AUTHOR]

The article focuses on the factors of slow labor market recovery and uncertainty on economic policy which has lessened the unemployment rate job vacancies in the U.S. It presents the 2012 job openings and labor turnover survey (JOLTS) which examines the uncertainty of unemployment rate by 1.3 percent. It also presents a research study which suggests the beveridge curve shifter with less intensive recruiting rates in job vacancies.

The article discusses aspects of China's monetary policy. It notes the prohibition of the country's private sector from freely trading foreign assets, as well as the move of the People's Bank of China (PBOC) in increasing the money supply to respond to capital inflows. It also cites the significant influence of lower foreign interest rates on the increment of sterilization cost. Moreover, a chart is presented depicting the share of foreign exchange in PBOC assets.

The article focuses on the impact of uncertainty on the U.S. economic activity and co-relation between uncertainty, unemployment, and inflation. It mentions that high uncertainity has raised the unemployment rate by at least one percentage point in the U.S. It further examines the increase in unemployment during the recession and recovery.

The article examines the impact of the aging population on the equity market in the U.S. It provides statistical data on the historical relationship between U.S. demographics and capital markets, which suggests close relationship and shift from buying stocks to selling equity holdings of baby boomers to finance retirement of equity values and the age distribution of the population. Also forecasted is the poor performance of equities in 2024 which could possibly depress stock prices.

The article focuses on the convergence of headline inflation and core inflation in the U.S. It says that headline inflation often deviates from core inflation through big fluctuations of food and energy price measured by personal consumption expenditures price index (PCEPI). It adds that the dynamic behavior of headline inflation will depend on the response of core inflation to food and energy price changes.

The article examines the association between unemployment and inflation in the U.S. based the context of the recession that started in 2007. Phillips curve model suggests that the high level of unemployment rate could contribute to the substantial decline in the inflation rate. Economists argue that the Phillips curve relationship between inflation and unemployment is a key part of the linkage between the short-term interest rate and the monetary policy objective of price stability.

Household surveys indicate that consumers expect higher inflation this year than in recent years, as the U.S. economy rebounds from the deep recession. This has coincided with a surge in commodity prices, as strong demand for goods like gas, food, and construction materials is catching producers with low supplies. Evidence suggests that households respond to commodity price increases by raising their expectations of future inflation. However, since surges in commodity prices are transitory, their effects on inflation expectations--particularly long-term expectations--are modest and short-lived. [ABSTRACT FROM AUTHOR]

Household surveys indicate that consumers expect higher inflation this year than in recent years, as the U.S. economy rebounds from the deep recession. This has coincided with a surge in commodity prices, as strong demand for goods like gas, food, and construction materials is catching producers with low supplies. Evidence suggests that households respond to commodity price increases by raising their expectations of future inflation. However, since surges in commodity prices are transitory, their effects on inflation expectations--particularly long-term expectations--are modest and short-lived. [ABSTRACT FROM AUTHOR]