Search results

The COVID-19 pandemic was a shock to the food supply chain without modern precedent. Challenges in production, manufacturing, distribution and retailing led to the highest rates of food price inflation in the US since the 1970s. The major goal of this paper is to describe statistically the impact of the pandemic of food price inflation and volatility in the US and to discuss implications for industry and for policymakers.

We use Bureau of Labor Statistics data to investigate food prices in the US, 2020–2021. We apply 16 statistical approaches to measure price changes and volatility and three regression approaches to measure counterfactuals of food prices, had the pandemic not occurred.

Food price inflation and volatility increased substantially during the early months of the pandemic, with a great deal of heterogeneity across food products and geographic regions. Food price inflation was most pronounced for meats, and contrary to expectations, highest in the western US Forecasting approaches demonstrate that grocery prices were about 7% higher than they would have been without the pandemic as of the end of 2021.

The research on COVID-19 and the food system remains in its nascent stage. As findings on food loss and waste, employment and wages, food insecurity and more proliferate, it is vital to understand how food prices were connected to these phenomena and affected. We also motivate several ideas for future work.

This paper analyzes real and welfare effects of a permanent change in inflation rate, focusing on macroprudential policy’ role and its interaction with monetary policy.

While investigating disinflation costs, the authors simulate a medium-scale dynamic general equilibrium model with borrowing constraints, credit frictions and macroprudential authority.

Providing discussions on different policy scenarios in a context where still it is expected high inflation, there are three key contributions. First, when macroprudential authority actively operates to improve financial stability, losses caused by disinflation are limited. Second, a Taylor rule directly responding to financial variables might entail a trade-off between price and financial stability objectives, by increasing disinflation costs. Third, disinflation is welfare improving for savers, while costly for borrowers and banks. Indeed, while savers benefit from policies reducing price stickiness distortion, borrowers are worried about credit frictions, coming from collateral constraint.

The paper suggests threefold policy implications: the macroprudential authority should actively intervene during a disinflation process to minimize costs and financial instability deriving from it; policymakers should implement a disinflationary policy stabilizing also output; the central bank and the macroprudential regulator should pursue financial and price stability goals, separately.

This paper is the first attempt to study effects of a permanent inflation target reduction in focusing on the macroprudential policy’ role.

The purpose of this study is to investigate the interplay between fiscal dominance and monetary policy in South Africa from 1960 to 2023.

The study employs a structural vector autoregression (SVAR) medel to analyze the relationship between fiscal dominance and monetary policy. Short-term and long-term shocks of government borrowing and deficits are examined to understand their impact on inflation dynamics.

Fiscal dominance has a significant effect both in the short and long run. There is evidence that government debt and deficits increase inflation, overriding the effects of monetary policy aimed at maintaining price stability. On the other hand, the study reveals that money supply shocks have a greater effect in reducing fiscal dominance compared to interest rate shocks. The variance movement on inflation is significantly explained by government debt and deficits. This emphasizes the persistence of inflationary pressures associated with fiscal dominance, highlighting the importance of effective policy interventions to mitigate inflationary risks.

This study contributes to the existing literature by providing insights into the dynamics of fiscal dominance in South Africa. Moreover, this study extends the theoretical framework of the fiscal theory of the price level (FTPL) and the government budget constraint. This study contributes valuable insights into the dynamics of fiscal dominance in South Africa and offers guidance for policymakers in formulating strategies to safeguard economic stability.

This study examines the importance of exchange rate and credit growth fluctuations when designing monetary policy in Thailand. To this end, the authors construct a small open economy New Keynesian dynamic stochastic general equilibrium (DSGE) model. The model encompasses several essential characteristics, including incomplete financial markets, incomplete exchange rate pass-through, deviations from the law of one price and a banking sector. The authors consider generalized Taylor rules, in which policymakers adjust policy rates in response to output, inflation, credit growth and exchange rate fluctuations. The marginal likelihoods are then employed to investigate whether the central bank responds to fluctuations in the exchange rate and credit growth.

This study constructs a small open economy DSGE model and then estimates the model using Bayesian methods.

The authors demonstrate that the monetary authority does target exchange rates, whereas there is no evidence in favor of incorporating credit growth into the policy rules. These findings survive various robustness checks. Furthermore, the authors demonstrate that domestic shocks contribute significantly to domestic business cycles. Although the terms of trade shock plays a minor role in business cycles, it explains the most significant proportion of exchange rate fluctuations, followed by the country risk premium shock.

This study is the first attempt at exploring the relevance of exchange rate and credit growth fluctuations when designing monetary policy in Thailand.

Marketplace lending has substantially changed since the first peer-to-peer lending platforms emerged in 2006. The industry is now an alternative to bank lending, predicted to total $70 billion for consumer and business loans worldwide by 2030. Marketplace lending is often deemed less safe than bank loans, mainly due to these portfolios' high degree of hidden information. These include needing more information on borrowers and potential correlations between them, which might lead to higher risk than is apparent at first glance. Deterministic processes cannot capture tail risk appropriately, so platforms and lenders should employ stochastic processes. This chapter introduces a Monte Carlo simulation and machine learning (ML) process to evaluate and monitor portfolios. For marketplace lending to become a viable and sustainable alternative to bank lending platforms, they must better evaluate, monitor, and manage tail risk in marketplace loans and develop tools to monitor and manage financial risk losses.

From these data, the authors construct an uncertainty index through the use of a vector autoregressive (VAR) model to measure the impact of uncertainty on GDP, controlling for inflation, which may affect macroeconomic performance. Results indicate that uncertainty is negatively correlated with the economic cycle and the inter-annual variation of the biannual average product.

This study empirically explores the dynamics of expectations of the Uruguayan manufacturing firms about industrial economic growth. This study explores the dynamics of the industrial economic growth expectations of Uruguayan manufacturing firms. The empirical research is based on firms' expectations data collected through a monthly survey carried out by the Chamber of Industries of Uruguay (CIU) in 2003–2018.

Granger causality tests show that uncertainty Granger-causes industrial production growth and a one standard deviation shock on uncertainty generates a contraction in the industrial production growth rate. Finally, the authors use statistical and network tools to identify groups of firms with similar performance on expectations. Results show that higher uncertainty is associated with smaller, more interconnected groups of firms, and that the number of homogeneous groups and the distance between groups increases with uncertainty. These findings suggest that policies focused on the coordination of expectations can lead to the development of stable opinion groups.

The paper introduces new data and new methodologies to analyze the dynamics of expectations of manufacturing firms about industrial economic growth.

1. An empirical approach to compare expectations of firms is introduced.

2. The occurrence of groups of opinion is tested.

3. Central companies in the network of expectations are detected.

4. More uncertainty implies a higher degree of discrepancy between the overall firm’s opinions and more compact opinion groups.

An empirical approach to compare expectations of firms is introduced.

The occurrence of groups of opinion is tested.

Central companies in the network of expectations are detected.

More uncertainty implies a higher degree of discrepancy between the overall firm’s opinions and more compact opinion groups.

This paper examines correlations of the underlying structural shocks and the degree of synchronization in the impulse responses of output, inflation and trade to a one standard deviation shock to non-oil commodities price index and exchange rates within the West African Monetary Zone (WAMZ) countries from 1990q1 to 2020q1.

This paper uses the structural vector autoregressive model to isolate the underlying structural shocks and compares them with the West African Monetary Union (WAEMU) countries.

Findings from the study suggest that correlations of underlying structural shocks are more profound in the WAEMU than in the WAMZ. Impulse responses of output to price and exchange rate shocks are more symmetric in the WAEMU than in the WAMZ. However, impulse responses of inflation to price and exchange rate shocks are symmetric in the WAMZ than in the WAEMU and responses of trade in both sub-groups are not uniform.

The paper concludes that the WAMZ does not constitute an Optimum Currency Area concerning the correlations of the structural shocks and output. However, it has achieved convergence in inflation and there are adequate adjustment mechanisms to shocks in the WAMZ than in the WAEMU. Therefore, the WAMZ may not suffer from joining the monetary union. Thus, economic Community of West African States may take steps to roll out the monetary union.

The paper examines correlations of the underlying structural shocks, impulse responses of output and inflation to shocks to commodities price and exchange rates in the WAMZ and compares them with the WAEMU.

The purpose of this academic paper is to analyze Argentina’s inflationary situation through an understanding of its monetary policy over the years, and to identify its effect on the country’s poverty, explaining the relationship between fiat currencies and stable currencies.

By analyzing the case of Argentina through descriptive methodology, the authors provide information on the use of stable currencies in Argentina and the reasons behind their use.

Through descriptive research, the authors were able to find out the situation regarding the use of stable currencies in Argentina. We identified how the country’s monetary policy has affected inflation and thus purchasing power parity.

Given that cryptocurrency information is based on privacy, there are certain arguments that must be referred through qualitative aspects.

The importance of stablecoins in high inflation countries.

The understanding on how cryptocurrencies are able to maintain purchasing power and help avoid inflation related poverty.

Discussion of cryptocurrency items, specifically stablecoins, has been limited due to their recent emergence and the existing discussion about their legality. The study presents an argument on the use of stablecoins by presenting a case that has not yet been studied.

This study aims to elucidate the dynamics of monetary and fiscal policy interactions in Brazil, focusing on the impacts of positive shocks in government consumption and interest rates. By comparing rational and behavioral agent responses, it clarifies how these frameworks influence gross domestic product (GDP), inflation, private and government consumption and nominal interest rates.

The study employs a new Keynesian dynamic stochastic general equilibrium (DSGE) model with Bayesian estimation from 2000Q1 to 2022Q4, capturing rational and behavioral behaviors with adjustments for Brazilian economic idiosyncrasies. Impulse response functions (IRF) assess the dynamic effects of policy shocks, providing a comparative analysis of the two frameworks.

Behavioral agents show greater initial sensitivity to policy shocks, causing more pronounced fluctuations in GDP, inflation and private consumption compared to rational agents. Over time, the behavioral approach leads to a more robust recovery, while the rational approach results in a quicker return to equilibrium but less pronounced long-term recovery. The study also finds fiscal policy can partially offset the negative impacts of monetary tightening, with a more delayed effect in the behavioral model.

This paper provides insights into the interplay between monetary and fiscal policies under different agent expectations, emphasizing the importance of incorporating behavioral elements into macroeconomic models to better capture policy dynamics in emerging markets.

The study aims to estimate the short- and long-run effects of monetary policy on residential property prices in South Africa. Over the past decades, there has been a monetary policy shift, from targeting money supply and exchange rate to inflation. The shifts have affected residential property market dynamics.

The Johansen cointegration approach was used to estimate the effects of changes in monetary policy proxies on residential property prices using quarterly data from 1980 to 2022.

Mortgage finance and economic growth have a significant positive long-run effect on residential property prices. The consumer price index, the inflation targeting framework, interest rates and exchange rates have a significant negative long-run effect on residential property prices. The Granger causality test has depicted that exchange rate significantly influences residential property prices in the short run, and interest rates, inflation targeting framework, gross domestic product, money supply consumer price index and exchange rate can quickly return to equilibrium when they are in disequilibrium.

There are limited arguments whether the inflation targeting monetary policy framework in South Africa has prevented residential property market boom and bust scenarios. The study has found that the implementation of inflation targeting framework has successfully reduced booms in residential property prices in South Africa.