Nominal Price Research Articles

On Monetary Growth and Inflation in Leading Economies, 2021‐2022: Relative Prices and the Overall Price Level

In the United States and numerous other economies, we are witnessing a flood of ad hoc explanations for inflation. These deal primarily with supply chain issues that have arisen since the COVID‐19 pandemic and the reopening of economies. There is a widespread view among officials at the Federal Reserve System, economists in the Biden administration, academics, and even large parts of the business community that the current bout of U.S. inflation is largely the result of supply chain disruptions that will turn out to be “transitory,” and that the inflationary pressures will dissipate in 2022 as the supply chain issues are resolved.The authors argue that this consensus will prove to be wrong because of its failure to distinguish between relative price changes and changes in the overall price level. The movement of any single set of relative prices fails to convey information about the overall inflation rate. And as asserted by the Quantity Theory of Money, the overall inflation rate and price level are determined by changes in the money supply broadly measured. Changes in relative prices, on the other hand, result from changes in demand and supply in the real economy, making them independent of changes in the money supply. So, while a doubling of the money supply will result in a doubling of all nominal prices, relative prices remain unaffected by monetary policy.According to the authors, political pressure and a misguided faith in the benefits of monetary stimulus have led many governments and their central banks to produce excess money since the COVID‐19 pandemic started in early 2020. As a consequence, the authors anticipate that the U.S. and Israel are likely to see increases in their overall price levels of approximately 28% and 20%, respectively, over the next few years, whereas the U.K. will likely see an increase of about 11% in the overall price level. Meanwhile, for countries like China, Japan, Switzerland, and New Zealand that resisted the temptation to create excess money, the authors anticipate negligible increases in the rate of overall inflation.

Technical Analysis of Tourism Price Process in the Eurozone

This study is a specific contribution to investigating normalities in prices to a well-established cointegrated vector autoregressive model (VAR). While the role of prices in computational economics has been investigated, the real prices vis-à-vis nominal prices in the decision process has been neglected. The paper investigates the transition from nominal to real time-series of prices without losing information in the data set when deflating or de-seasonalizing. The likelihood approach is based on careful specifications of the (co)integration characteristics of tourism prices. The results confirm that the transmission of tourism prices in the Eurozone positively impacts Slovenian tourism prices when the spatial consolidated cointegrated VAR model is used. The theoretical-conceptual and empirical contribution is twofold: first, the study develops and empirically applies bona fide divisor of normality consolidation for time-series in levels instead of routinely utilised inflation integers, and second, the study introduces perfection of prices on a long-run time-series treatment.

The role of heterogeneity in price rigidities for delayed nominal exchange rate overshooting

This paper develops an open economy New Keynesian model in which shocks to monetary policy generate delayed nominal exchange rate overshooting. We show analytically that delayed overshooting is a consequence of heterogeneity in nominal price rigidities. Immediately after a contractionary monetary shock, the reaction of firms with relatively flexible prices generates a strong response of inflation, alongside a currency appreciation. Overtime, as firms with relatively less flexible prices adjust, the appreciation continues, but is subsequently followed by a depreciation. In a calibrated version of the model, with heterogeneity in price rigidity matched with micro-evidence, the peak response of the nominal exchange rate to a monetary policy shock occurs at around 4 quarters.

Dry cooling retrofits at existing fossil fuel-fired power plants in a water-stressed region: Tradeoffs in water savings, cost, and capacity shortfalls

This study investigates the performance, cost, and generating capacity impacts of switching from wet cooling towers to dry cooling systems to reduce the consumptive water use at existing fossil fuel-fired power plants in a water-stressed region. Retrofit analysis of dry cooling is conducted on a unit-by-unit basis for both coal-fired and gas-fired power plants. Unit-level results are then aggregated to the regional level. Based on regional averages, retrofitting dry cooling systems in lieu of wet cooling towers decreases total annual plant water consumption at existing coal- and gas-fired power plants by 93% and 100%, respectively, while increasing the levelized cost of electricity generation by approximately 12% and 18%, respectively. Based on a nominal regional water price, this cost increase corresponds to an average cost of consumptive water savings of $2.5 and $5.9 per cubic meter of water saved at coal and gas plants, respectively, if retrofit difficulty is minimal. Over the course of a year, the change in monthly net regional generating capacity from dry cooling retrofits exhibits a seasonal pattern, with the largest shortfalls occurring in July. The average monthly reduction in net capacity is estimated at 0.7% and 1.2% of the regional nameplate capacity for coal- and gas-based plants, respectively. Dry cooling retrofits thus lead to tradeoffs in water savings, cost, and capacity shortfalls, which vary with power plant characteristics. The tradeoffs identified here can fill existing knowledge gaps to better inform electric power industry water management policies, planning, and decision-making in water-stressed regions.

The (dampened) wage-price spiral: Conflict, endogenous markup and inflation

In this paper we develop a wage-setting/price-setting model in order to investigate the inflationary and distributive effects of markup changes and nominal wages growing above labour productivity. Firms set nominal prices targeting a real desired markup but only some of them are able to fully protect profits from expected inflation. Nominal wages are determined by expected inflation, autonomous wage pressures and the unemployment rate. Endogenously, the model determines real wages, real profits and inflation. Outcomes will differ with respect to the possibility of permanent changes in distribution and which inflation regime will prevail (‘accelerationist’ or steady-state inflation). Our results contrast with the traditional literature on conflicting-claims, in which real profits do not change during the inflationary process and the Non-Accelerating Inflation Rate of Unemployment (NAIRU) is the only stable equilibrium for the labour market. We show that conflicting-claims, in general, cause steady-state (rather than ‘accelerating’) inflation and the distributive neutrality case is a particular outcome (the model generates pro-cyclical real wages as the general case). A second novelty is modelling firms’ desired markup as the outcome of a bargaining between firms and workers, with the risk-free interest rate as the outside option for firms, such that the model is shown to be able to explain the so-called “Gibson Paradox”, also known as the “Price Puzzle” (i.e., the positive relation between prices and interest rate). Last, by treating the nominal profit margins as the control variable of the firms, the model does not rely on price rigidity to generate endogenous changes in income distribution.

Novodobá pozice zlata v bilancích centrálních bank

The article focuses on the motives and trends in gold holdings by central banks in recent decades. It examines the correlation between the nominal and real price of gold and selected macroeconomic variables and financial assets over the financial and business cycles. In this context, it outlines gold investment opportunities for central banks and other investors. The paper also highlights differences in gold holdings between the central banks of advanced economies (including those with reserve currencies) and those of emerging market and developing economies. It concludes by presenting a rationale for the position of the Czech National Bank, which ranks among the modern central banks holding minimal amounts of reserve gold.

The Effect of Covid-19 on Unemployment and Price Changes in Ethiopia: Evidence from Woldia Town “Does The Downward Sloping Philips Curve Hold True at Micro Level”

The massive spread of corona creates pressure on the general systems of the world countries. As stated in some studies corona virus affect every institution and individuals of the world in many aspects. Specifically it results in high unemployment, low level of production and significance rise in the nominal price of commodities. This study tries to explain the change in those economic variables to analyze the effect of Covid-19 on the living standard of households in Woldia town, Amhara regional state of Ethiopia using a data obtained from the north wollo zone planning commission which had been collected from sampled individuals monthly. Since the issue is so recent and absence of many conducted researches on this area, this article have no specific chapter for review of literature and gives more focus for data analysis part. Then descriptive analysis indicates the presence of valuable rise in unemployment and average price levels simultaneously and the OLS regression result disproved the applicability of Philips curve for the study area under the influence of COVID-19. Keywords: COVID-19, Philips curve, Regression analysis, Unemployment, Woldia Town, Ethiopia DOI: 10.7176/RJFA/12-15-01 Publication date: August 31 st 2021

Evaluating a seasonal autoregressive moving average model with an exogenous variable for short-term timber price forecasting

In this paper roundwood prices were forecasted by means of the following time series models: (1) classical univariate autoregressive moving average (ARIMA), (2) seasonal univariate (SARIMA), and (3) seasonal bivariate with an exogenous variable (SARIMAX). The data consisted of time series of the nominal prices of pine, spruce, beech, birch, and alder roundwood and the construction confidence index (CCI) in Poland for the years 2005–2020. The results indicate that roundwood prices can be evaluated by the implemented time series models, with forecast accuracy depending on the time horizon, the model applied, and tree species. The incorporation of a separate component directly describing seasonal fluctuations into a conventional ARIMA time series model significantly improved the accuracy of roundwood price forecasts exhibiting seasonal variation. The CCI lagged by one to three quarters were found to be significantly correlated with the prices of roundwood. A SARIMAX model incorporating the CCI as a leading variable was able to account for changes in the business cycle, thus increasing the accuracy of short-term forecasts of the prices of roundwood used in the construction industry.

Выбор оптимального размещения данных при использовании облачной инфраструктуры

Benefits of using cloud technology are obvious, their application is expanding, as a result, it determines the steady growth of demand. Cloud computing has acquired particular relevance for large companies connected with Internet services, retailing, logistics that generate large volume of business and other information. The use of cloud technologies allows organizing the joint consumption of resources, solving the problems of storing and transferring significant amounts of data. Russian consumer cooperation refers to large territory distributed organizations actively forming their own digital ecosystem. The issue of data storing and processing for consumer coo-peration organizations is very relevant. At the same time, the prices of cloud service providers are significantly different and require solving the problem of minimizing the cost of storing and transferring significant amounts of data. The application of the linear programming method is considered to select the optimal data storage scheme for several cloud service providers having different technical and economic parameters of the package (maximum amount of storage, cost of allocated resources). Mathematical model includes the equation of costs for data storing and transferring and restrictions on the amount of storage, the amount of data and its safety. Software tool that allows to perform numerical calculations is selected Microsoft Excel in combination with the "search for solutions" add-on. In accordance with the mathematical model, the conditions for minimizing the amount of cloud storage costs and the necessary restrictions are established. Initial data are set for three data forming centers, storages of certain size for five cloud service providers and nominal price for information storage and transmission. Calculations of expenses are performed in several variants: without optimization, with the solution of the optimization problem, with price increase by cloud service providers. Results of the calculations confirm the necessity to solve the problem of minimizing the cost of cloud services for corporate clients. The presented model can be expanded for any cost conditions as well as for different areas of cloud applications.

Do oil and gas prices influence economic policy uncertainty differently: Multi-country evidence using time-frequency approach

This paper using data from major oil dependent countries examines the linear and nonlinear causal relationship, and time-frequency co-movement between economic policy uncertainty (EPU) and energy prices (oil and gas future prices). The empirical analysis considered wavelet coherence and wavelet phase angle tests. Moreover, our results more insights to answers whether the co-movement and causality between EPU and energy prices are different for oil and gas. EPU and oil future price returns move together but in the opposite direction. Oil futures price returns provide no additional information in explaining the policy uncertainty in comparison to the spot price returns. We also note that findings with nominal oil prices are similar to results with real prices. In times of economic turmoil or crises, the relationship between policy uncertainty and energy prices becomes stronger—and hence demands particular attention from policymakers, energy companies, and investors.

Profile Of Tourist Visits In Sangiran Site Area, Sragen Regency

Tourism activities are chain activities that involve various sectors and related institutions. Tourism is one of the fields in the lives of the people of Sragen Regency, which has become one of the priorities in development in recent years. This is based on the local government's awareness that tourism development can support regional income while at the same time increasing the standard of living of people living in tourist areas. For this reason, evaluating the impact of tourism in an area on the socioeconomic conditions of the community is an important thing to know. Sangiran is one of the most complete paleontological sites in Indonesia. Sangiran has also been designated as a cultural heritage by UNESCO on December 5, 1996, with the designation number C.593. The Sangiran site itself is located in Sragen Regency and Karanganyar Regency, Central Java Province. In general, the background of the population in the Sangiran Site area comes from the Javanese ethnic group, who in daily life communicate using the Javanese language. The Sangiran site has been known as an ancient human area from the Pleistocene. Not only storing archaeological wealth, but Sangiran is also very rich in artistic potential, both from prehistoric times and the present. Many things can be enjoyed in Sangiran. Apart from the museum that presents archaeological findings full of meaning, the public can also enjoy the local culture, including traditional arts, traditional ceremonies, local architecture, and folk crafts, adding value to the site. This study aims to determine the profile of tourist visits in the Sangiran Site Area. This study found that the factors that influence the number of visits to the Sangiran Site Area are travel costs, age, gender, and monthly income of respondents related to visiting the Sangiran Site Area. Furthermore, the factors that influence the respondents' willingness to accept ticket offers in the market hypothesis scenario in the Sangiran Site Area are the nominal price of the entrance ticket to a market hypothesis given to respondents, age, gender, monthly income of respondents, education level of respondents, and origin of the respondent.

DEMAND, SUPPLY AND REASONS FOR PRICE HIKE OF POTATO IN BANGLADESH

The objective of the study is to find out the factors behind the supply, demand and thereby prices of potato and explore the existence of syndicate in the market. The study is mainly based on secondary data. Additionally, some qualitative data were collected through FGD and KII from Bogura, Rangpur and Munshiganj areas. The area, production and yield of potato grew by 4.58%, 6.61% and 1.95%, respectively per annum since independence. The production of HYV potato rose sharply, while local one rose at a slower pace. Potato production exhibits high fluctuation with roughly three years’ cycle, which sharply decreased in the recent past. The nominal prices of potato witnessed upward trend, while real prices experienced downward trend since independence. There exists wide seasonal price variation of potato with the lowest price in March and the highest in December. Potato market seemingly integrated as prices at all levels move together. The rising trend of potato prices seems to be halted after re-fixing prices by DAM. Real prices displayed wide price variation as volatility index stands at 73.16%. The total surplus of potatoes in 2020 stands at 3.40 lakh MT which is much lower than the previous years. The profit earned by the potato growers was estimated at around Tk. 1.1 million /ha. The estimated DRC implies that Bangladesh had comparative advantage in potato production for export promotion. In 2020, 73% capacity of 392 cold storages in operation is utilized. It is concluded that main cause of the price hike was the artificial crisis created by some profit seeking traders rather than the low production and higher consumption of potato in the country. Fixation of price, regular market monitoring and taking legal action to the artificial crisis creators may be the way of avoiding unexpected price hike of potato in the country.

한국의 화폐환상에 관한 연구 (Money Illusion: Evidence from Korea)

Korean Abstract: 본고는 우리나라 성인들이 화폐환상(money illusion)을 지니는지 여부를 가계 설문조사를 통하여 검증하였다. 화폐환상이란 경제주체들이 물가변동을 고려한 후의 실질가치가 아닌 화폐의 명목가치를 중심으로 생각하고 판단하는 성향을 말한다. 우리나라 성인의 대표표본(전국 성인 남녀 500명)을 대상으로 검증한 결과, 기존 문헌의 질문을 이용한 설문조사에서는 화폐환상이 뚜렷이 발견되었다. 즉 일반거래나 주택거래, 금융거래의 손익과 임금 수준을 평가하는 데 있어 많은 응답자가 실질가격의 변화보다 명목가격의 변화를 중시하는 것으로 나타났다. 그러나 조금 다른 맥락의 질문을 제시한 경우에는 화폐환상 가설과 부합하지 않는 결과도 나타났다. 즉 명목가격을 명시적으로 제시하지 않고, 인플레이션이 발생하는 상황에서 앞으로의 투자계획을 바꿀 것인지 질문한 경우에는 인플레이션을 감안하여 포트폴리오를 조정하겠다는 합리적인 응답이 많이 나왔다. 또한 경제주체가 경험한 인플레이션율이 낮을수록 화폐환상이 높게 나타나는 등 합리적 무관심(rational inattention) 현상과 부합하는 결과도 발견되었다. 아울러 응답자들은 화폐환상 외에도 손실회피(loss aversion), 준거점 의존성(reference dependence), 프레이밍 효과(framing effect) 등 다양한 행태적 편향(behavioral biases)을 지닌 것으로 나타났다. English Abstract: This paper tests whether Korean households exhibit money illusion by surveying a representative sample of the adult population, 500 men and women living in the nation. Money illusion refers to the tendency to think and assess in terms of nominal monetary values, rather than real values controlling for inflation. When the survey questions from the existing money illusion literature were used, compelling evidence of money illusion was found: A majority of respondents relied on the change in nominal rather than real prices when assessing the profitability of transactions of houses, consumer goods, and financial products. However, evidence inconsistent with the money illusion hypothesis was also found in the answers to questions in a different context where nominal prices were not explicitly presented: When asked whether they would like to change their investment plan in a situation where inflation was present, respondents answered rationally that they would change the investment portfolio in consideration of inflation. We further found evidence consistent with the rational inattention phenomenon?the lower the experienced inflation, the stronger the respondent’s money illusion. In addition, respondents were found to have various behavioral biases other than money illusion, such as loss aversion, reference dependence, and framing effects.

Prediction of global sugar prices after abolition of EU sugar quotas

In the article two main goals were indicated. The first is to verify the hypothesis that there is not a relevant relationship between limiting the impact of state intervention mechanisms and sugar prices on world exchanges. The second goal is to choose the best model for forecasting sugar prices after the abolition of the sugar quotas on domestic markets of sugar producers. The starting point for building the model was the time series of sugar prices on a monthly basis on world stock exchanges – London and New York in 1990–2020. One of the three models was used for forecasting. Sugar prices on world stock exchanges showed large fluctuations amounting to USD cents 28 per pound of sugar for white sugar, while for raw sugar the figure was slightly lower and reached USD cents 26 per pound. On average, in 1990–2020, the nominal price for white sugar was 16 cents per pound, and for raw sugar -12 cents per pounds. However, the level of sugar prices in the world is determined primarily by market factors, rather than administrative constraints.

Saving of Using Electrical Energy of Induction Motor Through Regulations of Minimum Operating Voltage

Many devices use an induction-type electric motor as the prime mover, such as an electric drilling machine, cutting machine, cement mixer/sand, and various kinds of machinery contained in industrial textiles, automotive industry, and others. The use of machines is closely related to the application of electric motors that will essentially consume electricity vary depending upon the size of the motors that. And generally, this equipment always operates at a nominal price of electrical voltage or full voltage of 220 volts for example per phase or 380-volt three-phase. In this condition, when the motor is not fully loaded suppose half of its full load, it would be a waste of electrical energy consumption, especially if the motor is not given mechanical load on its axis. Therefore, this paper gives a little solution in saving electrical energy consumption of the motor. Two important things are studied in this paper regarding the working arrangements, namely the motor on the state of the start and on the state of the running.

Risk Premiums, Nominal Rigidities, and Limited Asset Market Participation

AbstractRecent developments in the asset pricing literature show that a combination of technology and distributive shocks can rationalize observed risk premia when firm ownership is concentrated in the hands of few households. We find that distributive shocks are unnecessary when nominal price rigidity is taken into account. Our results are driven by the income redistribution associated to procyclical variations in profit margins when firms ownership is concentrated, prices are sticky, and technology shocks hit the economy. In this regard, standard DSGE models that allow for firm ownership concentration have the potential to replicate both business cycle facts and the moments of financial variables.

Test Of Nominal Prices Of Sukuk In Indonesia

The nominal price of the sukuk has become an important element for companies and investors in determining the real value of the company from the perspective of companies and investors. The company determines the type of contract, maturity, maturity based on the type of contract and size of the company as an important element in determining the nominal price of sukuk according to research in 2016. A mathematical model has been formulated in the form of a multiple linear regression equation. This model has not been tested for reliability so that testing and research is needed in another year. 2019 is a comparative year for conducting research. The research was carried out in an exploratory manner. The sample used was 134 sukuk circulating in Indonesia. The result of the research shows that the nominal price of the sukuk predicted by the old model is correlated with the nominal price of the current sukuk at the 5% significance level.

Types Of Akad, Maturity, Company Size And Nominal Sukuk Price In Indonesia Stock Exchange (Idx) In 2016

Sukuk is currently a capital instrument of interest on the Indonesia Stock Exchange (IDX) because sukuk can increase profitability. The nominal price of the sukuk is influenced by maturity. But this maturity in 2016 is significant only at the 70% confidence level. This means that there is a lack of observation. This research was conducted to explore other variables that could affect the nominal price of the sukuk. It turns out that the size of the company affects the nominal price of the sukuk as well as the type of contract, maturity and maturity based on the type of contract. It turns out that the nominal value of the sukuk is influenced by the type of contract, the maturity is based on the contract, the type of contract based on maturity and the size of the company at the 95% confidence level.

Еволюція теоретичних підходів до DSGE-моделювання

This article attempts to analyze the evolution of approaches that constitute grounds for macro modeling. The counteraction to destructive consequences of crises assumes practical use of model apparatus as a necessary tool for preventing destabilization. The article aims to study the progressive stages and identify unsettled issues and promising ways to assist macro models' evolution. The fundamental Marshall's and Walras's platforms supported progressive changes following the destructive Great Depression and Great Inflation in the USA in 1920-1970 and marked a new trend in macro modeling called dynamic stochastic general equilibrium (DSGE) models. The new instrument is remarkable for a radical change in macro modeling approaches, where microeconomics comes to the fore. DSGE models debuted by invoking four essential ingredients: the Phillips curve, adaptive inflation expectations, anchoring nominal prices, and an endogenous production function. The progression stages of theoretical approaches to macro modeling incorporate the classical and Keynesian schools' advanced innovations. The evolution of macro modeling has five generations of models: Keynesian, classical, RBS, new Keynesian, and new Keynesian DSGE models. Among advantages of DSGE models are "political neutrality," distinguishing the shocks into economic and political ones, and establishing the upshots of significant structural changes in the economy. The next generation of macro models is called to solve four pressing issues: establishing financial frictions, relaxing rational expectations, introducing heterogeneous agents, and underpinning the framework with more appropriate microfoundations.

Forecasting energy commodity prices: A large global dataset sparse approach

This paper focuses on forecasting quarterly nominal global energy prices of commodities, such as oil, gas and coal, using the Global VAR dataset proposed by Mohaddes and Raissi (2018). This dataset includes a number of potentially informative quarterly macroeconomic variables for the 33 largest economies, overall accounting for more than 80% of the global GDP. To deal with the information on this large database, we apply dynamic factor models based on a penalized maximum likelihood approach that allows to shrink parameters to zero and to estimate sparse factor loadings. The estimated latent factors show considerable sparsity and heterogeneity in the selected loadings across variables. When the model is extended to predict energy commodity prices up to four periods ahead, results indicate larger predictability relative to the benchmark random walk model for 1-quarter ahead for all energy commodities and up to 4 quarters ahead for gas prices. Our model also provides superior forecasts than machine learning techniques, such as elastic net, LASSO and random forest, applied to the same database.