Inflation Indicators Research Articles

A New Indicator of Common Wage Inflation

AbstractWe develop a new indicator of common wage inflation (CWI) by extracting and aggregating the common components from detailed industry‐level nominal wage data. We show that the CWI is better aligned with the unemployment rate gap for the post‐Great Recession period than are other indicators of wage inflation. The CWI indicates a tighter economy than popularly cited wage measures during the expansion after the Great Recession, and the industry‐specific factors largely account for the subdued wage growth despite the continued tightening in the labor market.

Comparison study in inflation and economic development between Egypt and Saudi Arabia: Using data analysis

An increase in total demand over the natural supply causes inflation in Egypt. Currently, the government is not intervening to reduce prices, unlike Saudi Arabia, which does interfere. The government's direct aim is to limit the price rise, known as suppressed inflation. This study discusses the relationship between the inflation indicator and various dimensions of economic development (such as production, agriculture, industry, dependency, health, and education) in Egypt and Saudi Arabia from 1990 to 2022. The study found that inflation in Egypt was at a high rate during the study period, with an average of 9.9 %. This high average negatively affects four dimensions of development in Egypt: agriculture, dependency, health, and education. It positively impacts industry and production, but the positive impact is minimal compared to the adverse effects. The negative impact is powerful on the dimensions of education and health, which are related to the human element and have a primary influence on all other dimensions of economic development. This indicates the failure of the policy to combat inflation in Egypt and reduce its adverse effects on economic development dimensions. On the other hand, Saudi Arabia had a lower average inflation rate of 1.9 % during the study period, which negatively affected the health dimension of economic development but positively affected the dimensions of education and industry. The dependency dimension, measured by the external debt growth rate index, was excluded since there were no external debts with recursion.

The extraordinary events as an environment for the development and implementation of the monetary policy of the National Bank of Ukraine

The paper establishes that the extraordinary events represented by the pandemic and martial law over the past five years have become powerful catalysts for changes in the banking business. It is shown that maintaining the financial stability and defense capability of the country in the conditions of martial law are the main tasks of the NBU. It was established that due to the consistent and predictable position of the NBU, balanced monetary and regulatory policy, it was possible to ensure the stability of the financial system of Ukraine even in the difficult conditions of martial law. It has been proven that the introduction of restrictive measures is a necessary step to ensure the stability and security of the financial system of Ukraine in conditions of extraordinary events. It is shown that the banking system of Ukraine demonstrates the ability to function effectively, even in the extraordinary conditions of war, thanks to a high level of liquidity, sufficient capital and the ability to generate income. The main stages of monitoring the Monetary Policy Strategy of the NBU are proposed. It is shown that its main principles in the conditions of martial law are: preservation of the stability of the financial system and liquidity of banks; development and implementation of a monetary strategy that takes into account the peculiarities of the martial law; financial support to banks and the economy; restrictions and control on the foreign exchange market; readiness to take emergency measures; effective communication with the public and business community. Recommendations for improving the monetary policy have been developed, aimed at increasing its efficiency and flexibility, ensuring the stability of the financial system and supporting the economy in the conditions of martial law. It has been proven that a set of measures for analyzing and evaluating the effectiveness of monetary instruments, implementing changes to improve efficiency, revising target inflation indicators, analyzing the situation on the foreign exchange market, strengthening the communication strategy, conducting stress tests, coordinating with other branches of government, creating reserves and flexible mechanisms will make it possible to minimize the negative consequences of martial law and contribute to the faster recovery of Ukraine’s economy.

Food Inflation in Brazil in the Last Decade – Comparing Evolution Trends Before and During the COVID-19 Pandemic

Abstract The objective is to characterize food inflation in general and, particularly, the food items and agrifood chains, according to the level of exposure to foreign trade, degree of processing, and inflation indicators in nine metropolitan areas of Brazil between 2007 and 2022. Basically, the data used were surveyed by the Brazilian Institute of Geography and Statistics for the Broad Consumer Price Index (Índice de Preços ao Consumidor Amplo, IPCA). The study fully characterized the food inflation in Brazil between 2007 and 2022, which was aggravated during the Covid-19 pandemic. Food-at-home inflation was generalized among its household components. Items associated with animal protein tended to put the most pressure on food-at-home prices. Among the agrifood chains, the lowest price variations were observed in products with greater exposure to foreign trade. A greater price variation was observed for fresh or minimally processed food products compared to more processed food products. Among the nine cities studied, from all regions of Brazil, no major differences were found in the variations of food prices of all groups considered.

An Analysis on Determinants of Cash and L/C Export: Findings from Türkiye’s Export

The payment methods used in international trade are of significant importance for the financial flow of the involved parties. When it comes to transferring goods and funds across borders to their new owners, the risks faced by the parties may seem daunting. The use of a letter of credit payment method by banks serves a protective role, enabling the parties to engage in trade more securely. While the expenses linked to this approach are sometimes viewed as challenging for the involved parties, it is considered a significant enabler, particularly in new trade alliances. In fact, exporters' choices are classified in countries' trade statistics based on payment methods. This study aims to uncover the determinants of exports from Türkiye between January 2013 and September 2023, utilizing both cash in advance and letter of credit payment methods. To accomplish this objective, exchange rates and specific inflation indicators, and their causal relationship with export transactions based on payment types was examined using the Toda-Yamamoto causality test. The research findings indicate that exchange rates, inflation, and cash payment variables cause letter of credit payments. Conversely, only the foreign producer price index was identified as a cause for cash-based exports. These findings illustrate that economic indicators, which may pose risks for Turkish exporters, are reasons for important decisions. In light of these findings, recommendations have been made for exporters and policymakers to proceed cautiously in the face of different economic scenarios.

Pengaruh Penentu Kompleksitas Struktur Modal Perusahaan Sektor Pertambangan Bursa Efek Indonesia

This study aims to determine the determinants of capital structure complexity in the mining sector listed on the Indonesia Stock Exchange (IDX) for the 2017-2021 period. In this study, the factors that determine the complexity of capital structure include indicators of asset structure, company size, profitability, inflation, and interest rates, while the complexity of capital structure includes indicators of the size of the number of capital sources and the level of concentration of capital sources. The number of samples was 52 mining companies collected using purposive sampling technique. This study uses quantitative data obtained from data listed on the Indonesian Stock Exchange (IDX) and the World Bank portal, and uses panel data regression analysis techniques. The findings show that only asset structure has a significant positive influence on the complexity of capital structure, which is measured by the number of capital sources and the concentration of capital sources. Meanwhile, the variables of firm size, profitability, interest rate and inflation have no significant influence on the complexity of capital structure in mining companies.

A 16-Year Analysis of Aesthetic Surgery Volume and Its Association with U.S. Economic Performance

Abstract Goals/Purpose Historically, demand for plastic surgery has been associated with the performance of the United States (US) economy. Over the past two decades, the US has weathered a recession, several presidential election cycles, and has seen a rise in the use and influence of social media. Each of these events has led to varying effects on the economy, which undoubtedly have had an impact on plastic surgery demand and expenditures. Thus, this study aims to evaluate the relationship between indicators of economic performance and the popularity and profitability of aesthetic surgery from 2006 to 2022. Methods/Technique Data from the Aesthetic Society’s (AS) Aesthetic Plastic Surgery National Databank and the American Society of Plastic Surgeons’ (ASPS) Plastic Surgery Statistics Report was collected from 2006 to 2022. Surgical procedures analyzed included the most commonly performed cosmetic surgeries: breast augmentation, breast reduction, mastopexy, abdominoplasty, liposuction, blepharoplasty, facelift, and rhinoplasty. The non-surgical botox injections and dermal fillers were also included. A total of 24 variables were examined, including the 10 procedures and two composite variables—total surgical procedures and total injectables; case change percent difference and patient expenditures percent difference were recorded for each of these. Within the corresponding period, economic indices were collected, including personal disposable income per capita (PDI), consumer price index (CPI), medical care services CPI, average gross domestic product per capita (GDP), and annual average closing prices of the NASDAQ, S&P 500, and the Dow Jones (DOW). Pearson correlation tests were used to analyze the strength of association between each financial indicator and case volumes and expenditures for each procedure included in the ASPS and AS reports. Results/Complications From 2006 to 2020 ASPS data demonstrated GDP year-over-year (YOY) change that was positively correlated with case volume and expenditures across 13 out of the 24 different procedure metrics (54.2%). From 2006 to 2016, AS data was positively correlated with the performance of NASDAQ, S&P500, and DOW in 12 of the 24 procedure metrics (50%). GDP YOY change closely followed suit with positive correlations to 11 variables (45.8%). YOY change of PDI, CPI, and medical care services CPI were less frequently associated amongst both data sets. For ASPS data, YOY medical services CPI change was negatively associated with five variables, indicating that as medical services CPI increased, volume of procedures and expenditures decreased. PDI YOY change was not significantly associated with any variables. In the AS dataset between 2006 and 2016, CPI YOY change was not found to be significantly associated with any variables. Across 2019–2022, CPI YOY and disposable YOY change were found to be significantly associated with three variables each. Conclusion Our study suggests that aesthetic plastic surgery procedures and expenditures are most positively correlated with GDP. Stock market indices are additional financial indicators which have significant positive correlations with plastic surgery case volume and expenditures. Inflation indicators were less frequently correlated. Over this timeframe, several important financial events have occurred including the Great Recession, a stock market selloff in 2015 and 2016, and the COVID-19 pandemic. Each of these events, along with several election cycles and the increasing influence of social media and popular culture, have had variable impacts on consumers and the demand for aesthetic plastic surgery. Plastic surgeons should be familiar with US and global financial markets as they fluctuate with current events. While plastic surgery prices and demand may be difficult to anticipate, this study elucidates several factors that may be used by plastic surgeons as a bellwether for their practice.

Exposure and preparedness for wartime inflation in the EU: Retrospective cluster analysis

AbstractThe impact of the Russian-Ukrainian war on energy prices contributed significantly to European price increases in 2022. The study aims to find a linkage between the performance of 24 EU countries during the energy inflation crisis and their preparedness, vulnerability or exposure. The verified hypotheses reflect on the role of initial conditions of countries and the one-year impact of energy inflation on their economic performance. The two-step analysis first creates six clusters of countries based on their energy, trade, financial and political vulnerability, and preparedness indicators. The second step is to explore the shifts of clusters in expectations on macroeconomic indicators. Specific patterns of country groups are explored in the value and evolution of wartime indicators of inflation, GDP growth, consumer and business confidence, as well as FX volatility. The exploration concludes that the entry variables of clustering are relevant, and the EU countries can be segmented by dependency, energy, financial, and political aspects. Thus, it is possible to verify the distance in risk and exposure among EU economies. The impact variables demonstrated that the extent of the inflationary effect depended on the initial conditions. In addition, the research identified protective short-term factors against energy inflation originating in a trade and war context.

A 16-Year Analysis of Aesthetic Surgery Volume and Its Association With US Economic Performance.

Abstract Background Historically, demand for plastic surgery has been associated with the performance of the United States (U.S.) economy. Objectives This study evaluates the relationship between economic performance indicators and the popularity and profitability of aesthetic surgery from 2006 to 2022 considering several recessions and the rise of social media. Methods Data was collected from the Aesthetic Society's (AS) Aesthetic Plastic Surgery National Databank and the American Society of Plastic Surgeons’ (ASPS) Plastic Surgery Statistics Report from 2006 to 2022. Procedures analyzed included the most performed cosmetic surgeries, as well as neuromodulator injections and dermal fillers. Pearson correlation tests were used to analyze the strength of association between eight financial indicators and case volumes and expenditures for each procedure. Results From 2006 to 2020, ASPS data demonstrated gross domestic product (GDP) per capita year-over-year (YOY) change that was positively correlated with case volume and expenditures across 13 out of the 24 different procedure metrics (54.2%). From 2006 to 2016, AS data was positively correlated with the YOY change of the NASDAQ, S&P500, and Dow Jones in 12 of the 24 variables (50%). This was followed by GDP YOY change, with positive correlations to 11 variables (45.8%). YOY change of consumer-level finances and inflation indicators were less frequently associated amongst both data sets. Conclusion Our study shows that aesthetic plastic surgery procedures and expenditures correlate with GDP. While aesthetic surgery demand may be difficult to anticipate, this study elucidates several factors plastic surgeons may use as a bellwether for their practices.

Still flying blind after all these years: The Federal Reserve's continuing experiments with unobservables

AbstractIn 1994, we examined the Fed's abandonment of monetary targets in favor of “omens of impending inflation” (Papadimitriou – Wray 1994). Here we are, three decades later, and the Fed is still fumbling around with unobservable indicators of inflation in its quest to target stable prices. In what follows, we examine the evolution of the Fed's thought and practice over the past three decades, a period in which the Fed has increasingly turned to unobservable indicators that are supposed to predict inflation and unobservable tools that are supposed to fight inflation. We will show that our criticisms have also been raised by the Fed's own members and research staff. Moreover, we suggest that the Fed has far less control over inflation than is presumed, and, at worst, might have the whole inflation-fighting strategy backwards. We conclude with an assessment of the latest round of rate hikes.

The FINANCIAL PERFORMANCE AND MACROECONOMIC FACTORS AFFECTING SHARIA BANKING MARKET SHARE IN INDONESIA

This research aims to find out which variables influence the sharia market share in Indonesia. This research is quantitative research with secondary data. The variables used in this research are financial performance with DPK, NPF, FDR and ROA indicators, as well as macroeconomic factors with indicators of inflation, interest rates and exchange rates. The sample for this research is the 2019-2023 Islamic banking monthly report. This research uses multiple linear regression analysis methods with partial tests (t tests), simultaneous tests (f tests) and coefficient of determination (R2). The results of this research are that DPK and the exchange rate have a significant effect on market share, while other variables NPF, FDR, ROA, Inflation & Interest Rates do not have a significant effect on market share.

Pricing Adjustments of Investment Costs of Infrastructure Projects in the Slovak Republic: A Risk Worthy of Attention

The present article aims to highlight the risk of potential price adjustments associated with the uncertainty of market price volatility of construction activities during the implementation phase of infrastructure transport projects. Price adjustments in the conditions of the Slovak Republic are regulated by methodological guidelines, the main determinants of which are selected items of macroeconomic inflation indicators with a significant impact on the resulting volumes of financial claims for price adjustment and the total investment costs of project implementation. The impacts of the values of the macroeconomic forecast indicators in question on the volumes of price adjustments and co-financing of the public administration budget were examined based on regularly updated and published macroeconomic forecasts.

Unraveling Producer Price Inflation Pass-Through: Quantification, Structural Breaks, and Causal Direction

Abstract Producer price inflation has long been considered a leading indicator for consumer price inflation. However, the evidence supporting the cost-push theory of inflation over extended periods is inconclusive and lacks direct quantification. To address this gap, we employ structural break and causality tests, regression analysis, and local projection impulse-response functions. Our analysis allows us to precisely identify instances when producer prices lead consumer prices and quantify short-run and long-run pass-through rates. We find relatively robust evidence of a producer price pass-through rate between 8 and 12%. However, there are significant periods where unidirectional pass-through does not hold. Local projections reveal that producer price pass-through is small but persistent in states where producer prices lead consumer prices, and larger but shorter-lived in states where there is no causal directionality. Our findings enhance the understanding of producer price pass-through to consumer inflation, providing valuable insights for policymakers and market participants interested in accurately forecasting and managing inflationary pressures.

Analysis of the Influence of Macroeconomic and Global Factors on the Composite Stock Price Index on the Indonesia Stock Exchange

Fluctuations in the movement of the Composite Stock Price Index are caused by the influence of macroeconomic and global factors. Looking at the inconsistencies in the results of previous research, the significance of the influence is still questionable. In this context, this study aims to analyze the Influence of Macroeconomic Factors with indicators of Inflation and Money Supply, as well as Global Factors with indicators of World Oil Prices with the Error Correction Model (ECM) approach. Using research observations from 2021-2023, it was found that the variables Inflation, Money Supply and World Oil Price have a long-term influence on the Composite Stock Price Index on the IDX, while in the short term, only the World Oil Price variable influences the Composite Stock Price Index on the JCI.

Modelling Inflation Rate Uncertainty in India: An Empirical Study

In recent years, the concept of volatility has gained much importance in macroeconomic variables like stock market indices, exchange rates and price indices. In this study, inflation indicators like the Consumer Price Index Combined (CPI-C) and Wholesale Price Index? all commodities (WPI-AC) starting in 2014:01 and ending in 2023:04 in India are used to measure the inflation uncertainty. To show volatility both symmetric and asymmetric models which are GARCH type are employed. So, that an appropriate forecasting model could be projected. For CPI an asymmetric GARCH model is found appropriate while for WPI a symmetric GARCH model was shown appropriate in the analysis. The volatility of CPI is less than WPI as shown by the various variance tools applied in the paper.

THE EFFECT OF SELECTED MACROECONOMIC VARIABLES ON THE HOUSING PRICE INDEX IN TURKEY

This study investigates how the house price is affected by macroeconomic variables such as interest rate, exchange rate, money supply and inflation rate. Housing supply and housing demand determines house price. On the one hand, housing supply dimensions covers contruction cost, existing land, housing stock. On the other hand, housing demand dimension involves interest rate, consumer price index as the indicator of inflation, income, population growth and employment rate. In order to measure the effects of macroeconomic variables more accurately, the housing price index variable determined by the Central Bank was used. Depending upon monthly data for the period 2010-2023 in Turkey, VAR models are used. In this way it is intended to find the direction and degree of the effect of selected macroeconomic variables on the house price index by performing impulse response function and variance decomposition analysis. According to this analysis findings, interest rate and exchange rate had a significant effect on the house price index. In line with the results obtained after the variance decomposition analysis, it was determined that the interest rate had a 19% effect and the exchange rate had a 14% effect on the house price index at the end of the 10th period.

Moral dilemmas in food provisioning: Inflation, the claim for ‘just prices’ and for ‘fair wages’

The cost of living we envision here stems from an interpretation of the ‘cost of living’ phrase which addresses (1) macro indicators of inflation, (2) the difference between farm gate price and consumer price as a cost to farmers that endangers their viability, and (3) how this cost transfers to the wages of workers and endangers their livelihood. Finally, (4) we wish to highlight that the energy that needs to be invested to assure social reproduction at the scale of individuals and households – workers and employers in agriculture – and at the scale of entire political communities such as the nation-state or the European Union, is translated into moral dilemmas that mediate and produce material results – in people’s bodies, in the environment, in political mobilizations of different kinds. The ‘cost of living’ here expands into the multiple and situated meanings of what it costs to live and the practices that they support.

Relation Between Inflation and Capital Market in India

Capital market has significant influence on the inflationary situation in an economy both in the short run and in the long run. The general determinants which affect capital market are share indices, stock prices, prices of gold and silver, interest rate, exchange rate and even money supply can be treated as influencing variable when money is treated as capital. In this paper the author examined the impact of capital market on inflation in India during 1980-2022 taking CPI and WPI as the indicators of inflation and gold price, silver price, BSE index, BSE market capitalization, money supply and rupee dollar nominal exchange rate are considered as the indicators of capital market. Augmented Dickey-Fuller test was applied to verify unit root for all variables including break unit roots and the author calculated growth rates during 1980 – 2022 using the simple semi-log linear trend model. Author applied Johansen cointegration test and vector error correction models among the variables in both the cases of CPI and WPI and calculated short run causality through Wald test and long run causality through cointegrating equation. In VECM, the paper found one significant cointegrating equation in case of CPI and found three significant cointegrating equations in WPI. The paper found that CPI has long run causal relationships with BSE index, BSE market capitalisation, money supply and rupee dollar exchange rate and WPI has long run cointegrating relationships with BSE market capitalisation, money supply and rupee dollar exchange rate respectively. Rupee dollar exchange rate has short run causal relationships with CPI and again CPI and BSE index has bidirectional short run causality. According to impulse response functions, the responses of CPI to gold price, BSE market capitalization and money supply have been approaching towards equilibrium but finally diverged away from equilibrium. There are significant short run causalities from BSE index and money supply to WPI. The impulse response of WPI to gold price, silver price, BSE index, BSE market capitalisation and exchange rate of rupee have been converging towards equilibrium many times although diverged finally. The model can be modified by including interest rate, share prices, bond prices under monthly data analysis.

The Effect of Macroeconomics on Stock Prices Through Financial Performance as an Intervening Variable

This research aims to empirically test the direct and indirect influence of macroeconomics represented by inflation indicators, gross domestic product, and Bank Indonesia (BI) interest rates as independent variables on stock prices as the dependent variable and financial performance (ROA) as the intervening variable. The population of this research is pharmaceutical companies included in the IDX-IC F211 classification; the sample of this research is companies listed from 2020 to 2021. This research uses path analysis and panel regression on reviews as a test tool to detect the direct and indirect influence of relationships between the independent and dependent variables. This research shows that inflation and ROA directly affect stock prices. In contrast, BI interest rates and GDP do not directly affect stock prices. Inflation and GDP affect ROA, while BI interest rates do not affect ROA. ROA can mediate the effect of inflation and BI interest rates on stock prices but cannot mediate the effect of GDP on stock prices. This research implies that companies can use the findings of this research to identify how specific macroeconomic factors can affect financial performance. This can assist in planning risk management strategies to mitigate the negative impact of macroeconomic fluctuations.

ASSESSMENT OF MONETARY POLICY EFFICIENCY: METHODOLOGICAL ASPECT

The article considers methodological aspects of assessing the effectiveness of monetary policy and proposes a comprehensive approach to its research. Inflation targeting, as the central bank's obligation to adhere to quantitative indicators of inflation, has become a common monetary regime over the past 30 years in developed and developing economies. However, the impact of the pandemic and the war in Ukraine caused significant problems related to the low efficiency of this regime. Structural problems, the absolute openness of Ukraine's economy, significant inflation potential due to the dominance of non-monetary factors of inflation call into question the choice of the main goal of monetary policy – inflation targeting. The resulting consequences of such a policy are ambiguous. Therefore, after our victory, it is necessary to move away from the dogma of inflation targeting as soon as possible to a more flexible monetary policy with a wider set of target guidelines that will ensure economic growth for our country.