Trend Inflation Research Articles

The Federal Reserve's Interest Rate Increases and Their Effect on the U.S. and Global Economies under the Covid-19 Pandemic

This paper delves into the successive Fed rate hikes that began in March 2022 and their far-reaching impact on the domestic and global economy. The paper primarily examines the reasons behind these rate hikes, focusing on their response to the problems caused by the COVID-19 pandemic, particularly unemployment and inflation trends. The pandemic triggered widespread lockdowns, leading to severe supply chain disruptions and economic downturns. During this period, unemployment rates rose sharply and reached historic levels. Central banks worldwide had adopted loose monetary policies to stabilize economies in the short term. However, this also raised the risk of persistent inflation. Fiscal stimulus, intermittent interest rate cuts, and a raft of bailouts, such as the CARES Act, have added complexity to the economic landscape, affecting various sectors and necessitating higher interest rates to restore pre-pandemic stability. Disruptions in global supply chains played a key role in stoking inflationary pressures, eroding consumer purchasing powers, and highlighting the urgency for the US Federal Reserve to intervene by adjusting interest rates. Assessing the impact of these rate hikes on stocks shows a resilient market that remained optimistic about the U.S. economic recovery. In addition, the study outlines the impact of these rate hikes on foreign exchange markets, international capital flows, emerging markets, trade dynamics, and global competitiveness.

Impact of Inflation on Savings and Investments of Cooperative Societies in Awka South Local Government Area

This study is to ascertain the impact of inflation on savings and investments of cooperative societies in Awka South local government area. The researcher set to determine the effect of inflation on member’s savings, member’s investment and roles of cooperatives in addressing issue of inflation in the study area. To guide this study, three research questions and two hypotheses were formulated in line with the objectives of the study. The study was anchored on International Fisher Effect Theory by Irving Fisher (1930). The study employed a descriptive survey design, the instrument for data collection was questionnaire constructed for the study and calibrated with the 5-point Likert ordinal measurement and rating scale. The population of the study was 268 selected cooperatives members in Awka South local Government Area of Anambra State. The sample size used was 161 cooperative members using Taro Yamane formular. Adopting a judgmental sampling technique, 161 questionnaires was distributed, and 127 copies of questionnaire were completed and returned and used for this study which represent 78.9% response rate. Research hypotheses were tested using Z-Test. The finding revealed that there is a significant effect of inflation on member’s savings in the study area, had a p-value 0.0107 (p < 0.05). With a p-value 0.0170 (p < 0.05) indicating there is a significant effect of inflation on member’s investment in the study area. In view of the findings, the study therefore, recommends that stakeholders and cooperative societies in the study area carefully consider and actively manage the impact of inflation on members’ savings. Implementing strategies such as diversified investments, inflation-adjusted interest rates, and financial education initiatives can help mitigate the adverse effects of inflation, ensuring the preservation and growth of members’ savings over time. Cooperative societies should adopt proactive measures to safeguard and enhance investment portfolios. Strategies may include diversifying investments across asset classes, regularly reviewing and adjusting investment policies in response to inflationary trends and providing members with financial literacy programs to empower them in making informed investment decisions resilient to the challenges posed by inflation and also, to sustain and enhance these initiatives.

Time series-based Project Cost Forecasting Framework

Current inflation rates have significantly been increasing construction project costs globally. Thus, it is crucial to consider potential inflationary trends when estimating the cost at completion of prolonged projects. However, the absence of literature providing guidance on analyzing inflation trends and adjusting the ongoing project cost performance factor is a gap that needs filling. This study proposes a framework for estimating ongoing project costs based on trend and seasonality analysis of the project cost performance through the Holt-Winters method. The proposed framework also incorporates the estimation of project completion time and is applied to a real case study to assess its efficacy. The results are compared with the ones obtained through pre-existing index-based methods. This paper seeks to improve the accuracy of project cost estimation and management in challenging and uncertain economic environments by providing an alternative to the traditional cost at completion forecasting approach.

Trend Analysis of Inflation and its Relationship with Economic Growth of Nepal

Background: The price level and its growth, inflation, is an important economic indicator. Inflation can be defined as the persistent rise in the general price level across the economy over time. Inflation is an increase in the volume of money and credit relative to available goods resulting in a substantial and continuing rise in the general price level. Inflation is everywhere and is interestingly touchy issue in macroeconomics.Methods: This research is cross-sectional and analytical and is completely based on secondary data to examine the trend and impact of inflation on economic growth rate of Nepal. To find the relationship between inflation, GDP, growth rate, money supply, CPI correlation matrix and multiple regression model were used.Results: Globally the inflation rate of emerging and developing economies is projected to decline by 0.2 percentage points to 4.9 percent in 2021 from 5.1 percent in 2020. In 2021, among the South Asian countries Pakistan is expected to have the highest inflation and Maldives the lowest. The average inflation rate of Nepal during 2015 to 2020 was 6.1 percent. There is fluctuation in annual inflation rate. The trend of GDP and CPI index of Nepal is in increasing order. There is negative correlation between GDP and Inflation while positive correlation of GDP with growth rate, CPI, Money supply.Conclusions: It is very important that inflation be controlled in order to address poverty as well as economic growth. It can safely be concluded that policies that stabilizes the inflation to the certain threshold level matters for the long run economic growth

The Impact of the Federal Reserve Raises the Interest Rates on the US Stock Market Index: The Dynamic Perspective

In order to battle growing inflation, the Federal Reserve raised interest rates in March 2022 for the first time since 2018. This action signals the conclusion of the Federal Reserve's accommodative monetary policy adopted during the pandemic, coinciding with significant inflationary trends in the United States. One of the main focuses that this may bring is the effect on stock price. This article will use past data on NASDAQ stock prices to forecast future trends and will discuss the analysis. At the end, the research finds that Feds policy has let NASDAQ index decrease than expected trends in a long-term perspective. This suggests that the Fed's policy may have a more pronounced impact on long-term trends rather than short-term fluctuations. It also implies that investors should adopt a strategic, long-term approach to their investments, rather than reacting to short-term market noise. Investors may also consider implementing risk management strategies, including stop-loss orders and options contracts, to protect against sudden market downturns that may result from interest rate hikes.

Exploring the Role of Building Envelope in Reducing Energy Poverty Risk: A Case Study on Italian Social Housing

Energy poverty is a significant social, economic, and health issue which increasingly affects millions of households worldwide. Both climate change and the socio-economic crisis have aggravated this phenomenon, making families unable to keep adequate comfort conditions at home because of economic constraints and/or dwelling inefficiencies. Considering the recent inflation trends, as well as the global effort to reduce the building sector’s carbon emissions, energy retrofitting of buildings emerges as the most forward-looking strategy to cope with energy poverty risk. In the case of large building stocks, which are typical for social housing complexes across the EU, deep and fast energy retrofitting might prove challenging, especially considering the resource shortages and disruptions to occupants that may arise. Therefore, this article investigates the relationship between the envelope’s insulation ratio and the risk of energy poverty for households. To this end, diverse scenarios are defined, corresponding to progressive increases in the percentage of building envelope that is insulated. The resulting energy needs are calculated for each of them and correlated with local average incomes and relative energy expenses of households. This is tested on an Italian social housing demo case. The results confirm a predictable but not linear correlation between thermal insulation and reduced energy needs for heating, and an interesting side effect on cooling needs for scenarios that perform better in winter. As for income, energy cost has a greater effect on the energy poverty risk when monthly rent is lower, while energy prices have a major role when rent per month is higher.

INFLATION AND ECONOMIC GROWTH TRENDS: GLOBAL AND SOUTH AFRICAN PERSPECTIVES

This paper explores the global inflation and economic growth trends, with a special focus on South Africa, from the 1970s – the period marked by the crumbling of the Bretton Woods system and the ensuing stagflation – to 2022. Our exploration reveals that global inflation is driven mainly by advanced economies, and there are signs of a negative correlation between the levels of income and inflation rates. We observed a structural break in global inflation in 1995 when inflation substantially decreased and became more stable than before. Our analysis links this structural break and stability in inflation to the emergence of strict monetary policy regimes like inflation targeting. Emerging and developing economies experienced a substantial decrease in inflation after they adopted inflation-targeting policies, as compared to advanced economies. In contrast, AEs benefitted from a significant rise in their economic growth. For South Africa, the trends in inflation and economic growth displayed a different picture. Although negligibly, South Africa’s inflation rose three years after adopting inflation targeting. During the same period, the South Africa experienced rising economic growth. To better understand the relationship between inflation and economic growth, we suggest the use of extensive data and models to investigate the structural breaks experienced.

Evaluating the Predictive Performance of Monthly Inflation Rates in Sri Lanka using the Hybrid Model (HB)

Aims/ objectives: This study develops and evaluates a novel hybrid model (HB) for forecasting monthly inflation rates in Sri Lanka, a country with a unique economic context, from 1988 to 2021. By integrating the Autoregressive Integrated Moving Average (ARIMA) and Artificial Neural Networks (ANNs), the study aims to overcome the limitations of traditional linear models in capturing the nonlinear patterns often observed in Sri Lankan economic data. Objectives: The study aims to assess the predictive accuracy of the HB model against established models, emphasizing its adaptability and robustness over a historically significant period. Methodology: Utilizing historical data, the study compares the HB model's forecasting performance with other established models, focusing on the Mean Absolute Percentage Error (MAPE) as a key metric of predictive accuracy. Results: The HB model demonstrates superior forecasting accuracy, with a notable reduction in MAPE to 7.10%, indicating its effectiveness in capturing the complexities of the Sri Lankan inflation trend. Conclusion: This study contributes to the field of economic forecasting by presenting a model that not only provides more accurate predictions but also adapts to the specific economic conditions of Sri Lanka. The findings have significant implications for economic planning and policy-making, highlighting the utility of hybrid forecasting models in developing economies.

Effects of trade and financial openness on inflationary pressure in Nigeria

The continuous rapid upsurge in inflationary pressure in Nigeria amidst the gradual liberalisation of the country’s trade and financial market calls for questioning of the role of trade and financial openness in the inflationary trend in Nigeria, which makes the research on this issue relevant. The purpose of this study was to determine the effects of trade and financial openness on inflation in Nigeria. In the estimation of the model built to capture the objective of the study, the fully modified ordinary least squares was employed based on the data collected from the World Development Indicators covering the period of 1981 to 2023. The results showed that trade openness and exchange rate exerted a significant negative effect on inflation in Nigeria while exchange rate showed a significant positive effect. The study concluded that financial openness had a positive significant effect on inflation while trade openness and exchange rate exerted a significant negative effect. The need for government to review their foreign trade policies in such a way that the importation of both finished and intermediate goods and services from the rest of the world can be significantly reduced by boosting local production was recommended. The study offers two-folds contributions. It provides new information on the factors that determine inflation and it specifically shows the nexus among trade and financial openness. The findings therefore revealed that higher trade and financial openness raises inflation implying openness-induced inflation. The findings from the study will be of practical value to policy makers such as those in the fiscal authorities and the Central Bank of Nigeria in devising policies to tame the current inflationary pressure in Nigeria

Strategies and Practices for Dealing with Inflation in New York

New York City has experienced severe inflation in the aftermath of the COVID-19 pandemic, with significant negative impacts on the lives of its citizens. This study explores inflation in New York City, its causes, effects, and potential remedies. By analyzing data such as the CPI index and cases from relevant U.S. government websites, this paper explored inflation trends and their impact on the cost of living and socioeconomic factors. It is worth noting that inflation leads to an increase in the cost of living, a decrease in the purchasing power of money, and an increase in crime rates. The author also draws on successful anti-inflation strategies elsewhere to propose solutions for New York. Provides valuable reference for New York policymakers. The research in this article has important practical significance for the country to address inflation issues and grasp the direction of macroeconomic development.

A Critical Analysis of Pakistan's Budget 2023-24: The Fiscal Challenges

The paper presents a comprehensive analysis of Pakistan's Budget 2023-24 and its fiscal landscape, sketching the challenges and opportunities within its revenue generation, economic growth, and debt management. The primary challenge facing Pakistan’s economy is the gap between government revenue and expenditures. The country faces hurdles in tax collection, marked by a complex tax system, tax evasion, and discrepancies impacting the middle and lower-income classes. A mixed research method was used in conducting this study, analysis of fiscal data, extensive literature review, and consultations with economic experts. An in-depth analysis of Pakistan's revenue sources, inflationary trends, budget deficits, and global economic conditions was conducted. The results show a complex web of challenges in Pakistan's fiscal framework, the gap between revenue collection and government spending, high inflation rates, the imbalance between exports and imports, encircling tax evasion, and an intricate tax system. The paper offers a sequence of strategic reforms, emphasizing expense reduction, tax simplification policy, political and legislative reforms, and encouraging investment for economic stability. It also highlights the need for coordination among government organizations, strategies to attract Foreign Direct Investment (FDI), and endorsing Human Resource Development (HRD) for a skilled workforce. The analysis highlights the importance of reforms in the governance structure, taxation system, and spending to achieve stability and economic growth in the country.

Impact of Intellectual Capital on Financial Performance of Listed Oil and Gas Firms in Nigeria

This paper examines the impact of intellectual capital on financial performance of listed firms in Nigeria. To achieve this objective; quantitative research design was employed. Data were generated from the annual reports and accounts of the sampled listed oil and gas companies from 2016-2020. The period is chosen and believes to be adequate in providing insight on the inflationary trends which the industry experienced. Similarly, the period of five years selected is in line with the studies of Muhammad and Rashid, 2015 as well as Iyande, 2018. Intellectual Capital as independent variable was measured by its components (HCE, SCE and CEE) while financial performance being the dependent variable was measured by NPM and ROE. Regression technique was used as tools of data analysis and the findings establish that the independent variables (HCE, SCE and CEE) have significant positive impact on the oil and gas companies’ Financial Performance proxies by NPM and ROE. The regression results show R-square of 86.1% and 59.4% for NPM and ROE models respectively. This implies that the model is fit and the explanatory variables are properly selected and account for the substantial value of the corporate profitability. Hence, the paper recommends that listed oil and gas companies in Nigeria should improve their efforts to boost the value of their intellectual capital for its crucial impact on NPM and ROE. This can be achieved through maximization of market value created, intellectual capital return and more investment in intellectual capital components, particularly human, structural and relational/customer capital.

Forecasting Consumer Price Index Expenditure Inflation for Food Ingredients Using Singular Spectrum Analysis

Inflation is an economic problem that significantly impacts the macro economy and people's real income if it occurs continuously. South Sulawesi Province often experienced significant inflation fluctuations during 2005-2019. In 2015, inflation in South Sulawesi reached 3.32%, ranking the highest in Eastern Indonesia. Ten food ingredients played an essential role in influencing inflation that year. However, until now, research on forecasting Consumer Price Index expenditure inflation for food ingredients in South Sulawesi using the Singular Spectrum Analysis method has never been carried out. The novelty in this research lies in using the Singular Spectrum Analysis method, which provides a new contribution to forecasting inflation trends in South Sulawesi and deepens understanding of regional inflation problems. This research aims to forecast consumer price index expenditure inflation for food ingredients in South Sulawesi using the Singular Spectrum Analysis method. This research used CPI expenditure inflation data for food ingredients from the official website of the Central Statistics Agency of South Sulawesi for the monthly period from January 2014 - June 2022. The forecasting results show that the lowest inflation rate is predicted to occur in December 2022 at -0,12%, while the highest level is expected to be reached in May 2023 at 0.43%. Furthermore, the mean absolute percentage error value of 3.54% indicates that the forecasting model has a very good level of accuracy. The results of this forecasting have the potential to be used by economic policymakers in South Sulawesi in designing more effective policies to overcome the problem of inflation, especially in the food ingredients and its impact on society. The practical implications of this research can help improve regional economic stability and community welfare.

Trends In The Valuation Of Indian Currency Since 1991

This paper aims to explore the dynamics of trends in currency valuation by studying the relationship between inflation and exchange rates after the period of Economic Reforms in India. The scope of the paper also explores the interconnection of exchange rates and inflow of FDI in the country and the balance of trade. We examine trends in inflation through the Wholesale Price Index and Consumer Price Index, over the sample period. We aim to use statistical tools, namely correlation, the standard deviation to indicate the relationship between the variables in addition to the tools of data analysis, to extricate the desired results.

Can an Electronic Money Transaction Raise the Inflation Rate? (Indonesian Pre-Pandemic)

Along with the rapid growth of technology, payment instruments are also changing. Electronic money is slowly but surely replacing the role of paper money and coins. The emergence of electronic money can provide convenience for consumers, it can lead to an increase in the demand for goods and services that ultimately leads to demand-pull inflation.The purpose of this study is to determine the impact of electronic money transactions (both in natural and in value terms) on inflation growth. By using the Chow Breakpoint Test, Difference-in-Differences and Propensity Score Matching shows that the inflation trend has tended to decline since the Bank of Indonesia launched its national non-cash campaign.By using the ordinary least squares (OLS) method was revealed that an increase in the volume of electronic money transactions in the long-term may affect a decrease in inflation, but not in the short-term. The rate of interest of the Bank of Indonesia, the growth of lending and GDP led to the decline in inflation.It was concluded that the Bank of Indonesia could expand the use of electronic money to manipulate inflation levels in the long-term. The policy that can be implemented by Bank Indonesia is to distribute electronic money infrastructure services more evenly and increase the socialization of the use of electronic money, especially in remote areas.

The Long-Run Costs of Higher Inflation

This Economic Commentary provides an overview of several frictions and the channels through which they affect economic welfare under elevated trend inflation above 2 percent. These frictions, associated with financial transactions, price and wage stickiness, and cognitive limitations, suggest that inflation imposes significant costs on society. Higher inflation may lead to a steeper Phillips curve, a situation which increases the volatility of inflation and interest rates.

A Study On Perception Of Millennials On Fintech And Cryptocurrency

A generation of millennials is rewriting the rules of the investment and Fintech industry. In contrast to the past when they played a relatively passive role, they now are leading some of the hottest trends in the industry. Today, it is the millennials who are driving many hot investment industries. For example, Robin hood a company founded by millennials, has disrupted the stock market and investment industry. The Federal Reserve's expansionary policies during the Covid-19 pandemic resulted in significant gains in cryptocurrencies and other assets. The Federal Bank responded to the trend of inflation and deflation by lowering interest rates and implementing a quantitative easing programme that pushed its balance sheet to over $8.5 trillion. This, in turn, led many millennials to seek alternative assets that offered better returns than cash. Cryptocurrencies have emerged as one of the most popular assets among millennials.

Inflation in Yemen: A Threat to Stability and Development

This research study looks at the causes and consequences of inflation in Yemen, with a particular emphasis on the economic variables that contribute to inflationary pressures and the efficacy of strategic efforts in limiting their influence. The research takes a comprehensive approach, including both qualitative and quantitative approaches. A thorough examination of the current literature on inflation in Yemen is carried out in order to identify important economic variables driving inflation trends. In addition, case studies of strategic initiatives conducted by policymakers and international organizations are reviewed to assess their effectiveness in reducing inflation. The study's findings highlight numerous crucial economic elements that are fuelling Yemen's inflation. Notably, price controls, targeted subsidies, and other strategic interventions, such as monetary policy adjustments, have been shown to be beneficial in decreasing inflationary pressures. Furthermore, the study emphasizes the importance of political stability, foreign help, and structural reforms in strengthening Yemen's economy and its capacity to sustain stable pricing over time. Furthermore, examining strategic interventions improves comprehension of their efficiency in combatting inflation, while a full assessment of economic variables gives light on the underlying causes of inflation in Yemen.

The Influence of Inflation on the Consumption of Chinese Residents

China's inflation rate fluctuation is higher than that of developed countries in the same period, while the world has achieved remarkable economic development. With the economic growth and the increase of income, the problem of income inequality in China has become increasingly prominent. The polarization between rich and poor will affect social stability and become a huge resistance to building a well-off society in an all-round way. Exploring the relationship between inflation and income inequality, and proposing targeted measures to reduce the income gap, is of great practical significance for China to deepen reform and enhance people's sense of happiness and gain. China's economy has also been affected by imported inflation in the context of the global epidemic. This paper will analyze the basic theory of inflation and related effects, and focus on its impact on China's macroeconomic consequences. This paper uses the swot analysis method to analyze the current inflation test in China from the negative and positive effects, threats and opportunities, and interpret the relevant policies of China at the current stage and make a reasonable forecast of the future inflation trend.

Inflation, interest rates and the predictability of stock returns

This paper focuses on the predictive role of inflation and interest rates in forecasting stock returns. We report economically significant in-sample evidence that stock returns are predictable using cyclical components of inflation and interest rates. The out-of-sample analysis results show that these cyclical components have reasonable out-of-sample predictability for the equity risk premium when the comparison is made against a historical average benchmark. We believe this is due to the fact that both inflation and interest rates contain stochastic trends. Accounting for changes in trend inflation (and equilibrium real interest rate) is essential for forecasting stock returns.