Macroeconomic effects of inflation target uncertainty shocks

Arbex, Marcelo; Caetano, Sidney Martins; Corrêa, Wilson Luiz Rotatori

doi:10.1016/j.econlet.2019.05.009

Cited by 5 publications

(3 citation statements)

References 31 publications

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“…Marcelo Arbex, Sidney Caetano, and Wilson Correa (2019) researched the macroeconomic effects of uncertainty shocks on the Inflation Target (TI) using the variables interest rate, unemployment rate, consumption, output, and inflation volatility (contraction of aggregate demand shocks). This effect causes unemployment to increase, the inflation rate does not react positively to TI.…”

Section: Literature Reviewmentioning

confidence: 99%

Spillover effect of inflation in Indonesia

Widiarsih,

Taifur,

Ridwan

et al. 2024

Preprint

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The economic benefits of inflation analysis are generated after a shock or after the regions interact. This research is spatial panel modeling. The weighting matrix used is Double Power Distance Weights wich gives the best result using Spatial Autoregressive (SAR) model with Fixed Effect Model (FEM). Spatially, inflation in a region has an impact on 2 nearby regions with high correlation. Impact measure is the significant impact of infrastructure, Bank Indonesia Performance (BI performance), Locally-Generated Revenue (PAD), government spending, and energy consumption on inflation, both directly and indirectly. Analysis of the p-value is smaller than the alpha of 5% and 10%, so the direct effect on PAD, government spending, infrastructure, BI performance, and energy consumption is significant on inflation in Indonesia. The findings are interesting because the value of indirect impact is greater than the direct impact, so it can be interpreted that the interaction factor between regions is very strong. Accessibility of infrastructure between regions causes interaction and mobilization to occur. The findings of this research provide recommendations that the government needs to improve physical connectivity (roads, toll roads, bridges, airports, ports, etc.), both for the western and eastern regions of Indonesia. Elements of government fiscal policy with a countercyclical character in managing government finances as well as efficiency in energy management & consumption in creating lower energy intensity values can be recommended because they are determining factors for controlling Indonesia's inflation.

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Section: Literature Reviewmentioning

confidence: 99%

Spillover effect of inflation in Indonesia

Widiarsih,

Taifur,

Ridwan

et al. 2024

Preprint

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“…При этом полезность данных исследований в том, что они показывают эффект таргетирования зависимым от состояния финансовых институтов и характеристик банковской системы. Последствия и неопределенность влияния таргетирования на саму инфляцию зависят от правила Тейлора, принятого монетарными властями страны [6], а также от влияния «глобальной инфляции», которое слабо для стран со средним и низким доходом [2,3].…”

Section: Introductionunclassified

“…В зависимости от удобства анализа и качества подбираемой модели, отбраковки моделей при их построении 6. Основные направления единой государственной денежно-кредитной политики на 2023 год и период 2024 и 2025 годов.…”

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Inflation Targeting: Eliminating Economic Growth and Structural Deformation in Russia

Sukharev,

Voronchikhina

2024

jour

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The paper examines the impact of the inflation targeting policy as a basic component of the government’s general anti-inflationary measures on economic growth and the structure of the Russian economy. The purpose of the study is to identify the impact of targeting policy in Russia on the rate of economic growth and the structure of the economy, represented by aggregated sectors — manufacturing and transactional raw materials. The research methodology consists of empirical-statistical structural, index methods of analysis, econometric modeling, reduced to the construction of factor models by type of production functions. Taking into account these methods, an algorithm has been developed to assess the impact of price dynamics and its targeting on macroeconomic dynamics and structure of the economy. Following this algorithm allowed, on the one hand, to give measurable estimates of the impact of consumer and industrial prices on general inflation in the country, and of inflation itself on GDP dynamics, on the other hand, to determine the degree of deformation of the structure of the Russian economy under the influence of inflation targeting policy. The main result of the study is that the large role of the transactional raw material sector in generating inflation and the fact that the introduction of targeting as a method of inflation suppression policy fixes the structure of the economy, slowing down development, which also affects growth towards its slowdown, is confirmed. Thus, a moderately restrictive monetary policy slows down growth and deforms the economic structure. The prospect of applying the results is that a change in inflation targeting policy, as well as an approach that assesses the impact of price dynamics on economic growth and its structure, which should lead to the justification of flexible ranges of inflation targets and the targeting of nominal GDP as a policy goal, taking into account the necessary change in the sectoral economic structure. In theoretical terms, future research on the adsorption of the money supply by the economic structure and determining the impact of such absorption on price dynamics is important.

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