Items related to Does Demand Variability Lower Growth and Raise Inflation?

Does Demand Variability Lower Growth and Raise Inflation? - Softcover

Kandil Magda

 
9783659686528: Does Demand Variability Lower Growth and Raise Inflation?
Softcover
ISBN 10: 3659686522 ISBN 13: 9783659686528
Publisher: LAP Lambert Academic Publishing, 2015

Synopsis

The paper investigates asymmetry in the allocation of aggregate demand shocks between real output growth and price inflation over the business cycle in a sample of fifteen Caribbean countries. In most countries, the evidence indicates the existence of structural constraints, implying that positive demand shocks feed predominantly into prices while negative demand shocks mainly affect output. The high variability of aggregate demand in Caribbean countries, frequently exposed to shocks that are exacerbated by pro-cyclical policy stance, tends to create an upward bias on inflation and a downward bias on real output growth, on average, over time. The analysis highlights the benefits of eliminating structural rigidities responsible for asymmetric real and inflationary effects and points to the dangers of pro-cyclical macroeconomic policies that exacerbate the adverse effects of demand variability.

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Publisher
LAP Lambert Academic Publishing
Publication date
2015
Language
English
ISBN 10 
3659686522
ISBN 13 
9783659686528
Binding
Paperback
Number of pages
52