Deflation

This paper evaluates whether Nigeria is ready to adopt inflation targeting (IT), a monetary policy framework that several emerging markets have adopted over the last one decade. The paper reviews literature on selected conditions for successful implementation of IT and then ...

An artificial neural network (hence after, ANN) is an information processing paradigm that is inspired by the way biological nervous systems, such as the brain, process information. In previous two decades, ANN applications in economics and finance; for such tasks as pattern reorganization, and time series forecasting, have dramatically increased. Many central banks use forecasting models based on ANN methodology for predicting various macroeconomic indicators, like inflation, GDP Growth and currency in circulation etc. In this paper, we have attempted to forecast monthly YoY inflation for Pakistan by using ANN for FY08 on the basis of monthly data of July 1993 to June 2007. We also compare the forecast performance of the ANN model with conventional univariate time series forecasting models such as AR(1) and ARIMA based models and observed that RMSE of ANN based forecasts is much less than the RMSE of forecasts based on AR(1) and ARIMA models. At least by this criterion forecast bas...

In Ireland the link between real disequilibrium (such as the unemployment gap) and inflation (either price or wage) is blurred by external factors, operating through traded goods price inflation. Attempts to extract information about the unobservable NAIRU from aggregate inflation measures, such as the HICP or wages inflation, are likely to be swamped by these external factors. This paper uses a measure of ‘domestically generated’ inflation (defined as the gap between the services inflation rate and the goods inflation rate), to capture domestic inflationary pressures arising from the labour market. A strong relationship is seen to exist between ‘domestically generated’ inflation and labour market tightness. The results also suggest that the NAIRU may not have varied significantly since 1979, despite the large movements in unemployment over the same period.

... Page 16. Deflation and Stock Exchanges Page 14 public house toward payment of the dividends on new capital – new capital that had been issued precisely to purchase the exclusive vending rights to beverages sold in previously independent, free, pubs. ...

The intention of this mechanical engineering project is to fabricate a scrap collecting machine. Since complete automation is very complex and even research facilities haven’t come up with one, you better design one that is operated via a remote control.
The automatic scrap collecting machine is designed to remove metal scraps from the work station to the disposal area with the help of Magnet and IR sensor. The use of this automated vehicle system reduces human ef orts and the chances of hazard.
The collecting work station consists of the work room, conveyors and iron shattering machine. The big iron scraps from the work area is collected by a conveyor and is brought to an iron shattering machine to reduce its size. This shattered iron scraps are brought away from the machine to the rail module through a conveyor for disposal.
An electromagnetic field is a physical field produced by electrically charged objects. It af ects the behavior of charged objects in the vicinity of the field. The electromagnetic field extends indefinitely throughout space and describes the electromagnetic interaction. It is one of the four fundamental forces of nature.
The field can be viewed as the combination of an electric field and a magnetic field. The electric field is produced by stationary charges, and the magnetic field by moving charges (currents); these two are often described as the sources of the field.

DISCLAIMER: The views expressed in this Research Report are those of the author and do not necessarily represent those of the Social Policy and Development Centre (SPDC). Research Reports describe research in progress by author (s) and are published to elicit comments ...

Il vincolo esterno, da Bretton Woods a Maastricht, passando per i trattati di Roma, ha rappresentato l'ancoraggio per un capitalismo dalle deboli radici, scarsamente capace di assumere una veste egemonica nei confronti delle classi subalterne, legato a una concezione dello sviluppo in cui un ruolo fondamentale era affidato “al contenimento dei salari e, in genere, dei livelli di vita operai” . In questa prospettiva, il vincolo esterno, nell’interpretazione di esso data dalle classi dirigenti, ha agito come un meccanismo di “stabilizzazione” – nell’accezione a quest’ultimo termine attribuita da Charles Maier, cioè come restaurazione (o rafforzamento) delle gerarchie sociali del capitalismo  – contribuendo così alla perpetuazione dei tratti originari del capitalismo italiano.
Nell’Italia post seconda guerra mondiale tali tratti originari sono stati messi in discussione almeno tre volte: nell’immediato dopoguerra; nella “congiuntura” che segnò la fine del boom economico a inizio anni Sessanta; e nei “lunghi anni Settanta” aperti dall’ondata di conflittualità socia-le del 1968-69. In tutti e tre i casi il vincolo esterno ha giocato un ruolo chiave per il ristabilimento delle gerarchie capitalistiche. Il paper cerca di illustrarne il ruolo negli ultimi due.

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The book presents a theory of necessity to adjust money supply to account for productivity if deflation is to be avoided. The monetary agent (central banker) is a market participant who is not profit oriented and can create money at will, and thus not be subject to rational investor constraints. The monetary agent's power is similar to or greater than investor power in the market. Businesses leverage low interest rates enforced by the monetary agent to increase their activity, and growth rates, increasing employment to compensate for the reduced labor necessary to create the former level of goods and services. This leveraged difference in returns is the equity premium. Since productivity is a "rate" of production, even a one time increase requires a corresponding permanent increase not in the money supply itself, but in the "rate of increase" of the money supply. Given the steady growth in productivity of the last 100 years, the world economy is now grossly under-stimulated and in danger of precipitous deflation.

Both academic models and arguments based on historical events are presented, along with analysis of the meaning of money, investor behavior, and practical techniques for obtaining the equity premium in one's portfolio.

There is a characteristic moral economy of deflation, and it can be traced with clarity in the case of Japan’s long deflation of the 1920s. Deflation emerged as an issue in 1919 and went to an extreme in 1929–31, under the liberal cabinet of Hamaguchi Osachi. To support its deflation policy, the cabinet launched an extraordinary campaign to induce households to reduce their consumption. Consumption was a specifically gendered conception, and women’s place as subjects and as objects of consumption became the symbolic center of a historic confrontation between orthodox “monetarist” and novel “Keynesian” ideas.

Long-run and short-run inflation expectations indicate the quality of anchoring and central bank credibility for its inflations target and expected pass-through of inflationary shocks. In this paper we provide a comprehensive literature review and find that changes and credibility of policy targets are passed through long-run and short-run expectations while shocks affect mainly short-run expectations and influence long-run expectations if they are sequential and not-accommodated. We exemplify our hypothesizes by empirical models and find that short-term expectations compared to the medium-term have a weaker link to long-term expectations.

The Western world in general is experiencing price increases that have not been recorded in decades; in the United States in particular, inflation is now running at a 40-year high of 7.5%, and the Federal Reserve is puzzling over how to exit the inflation tunnel without generating a recession.

With the consumer and producer price indexes recording respectively a 3.23% and a 9.99% annual increase in 2021, led by energy and food items, the debate about inflation finally reached Malaysia too; as happened everywhere else in the world, supply-chain disruptions have been blamed, while the monetary nature of inflation has not been recognized.

The Center for Market Education first warned about inflationary pressures in March 2021 and continued to do so throughout the year. We stressed in particular that inflation is a monetary phenomenon due to the quantity of money rising faster than output. We also explained how the increased quantity of money, generated by expansionary fiscal and monetary policies implemented to address the harms created by lockdowns, created a dichotomy between the real economy and the (over)availability of financial means, a dichotomy that could result in a distortion of the production structure, in a boom-and-bust cycle and, ultimately, in unemployment.

The results of such policies, which were a reaction not to COVID-19 per se, but to the harm created by stay-at-home orders, can be summarized as follows:
- Excess money supply, generating inflation;
- Price inflation, while during an economic crisis price deflation should be favoured (as we shall see);
- GDP still below the 2019 level, despite the expansionary policies;
- A fragile recovery resting on government consumption and government aid-led private consumption;
- A non-friendly ecosystem for investments.

We need to stress, once again, the unavoidable need for a plan of gradual government spending cuts in order to contain inflation, while a rise in interest rates would be detrimental to the investments that are very much needed now.

In this paper, we emphasize that another necessary measure is to abandon the fear of deflation which guides many choices in monetary policy. Are falling prices really such a disaster for an economy that they justify a massive liquidity injection, or are they just an excuse to allow welcome money production to benefit those disadvantaged by price deflation?

In the paper we argue that price deflation in most cases is something natural to the market, or that it is the beneficial – although painful – market reaction to government intervention. We conclude that policies enacted to prevent price deflation lead to harmful consequences for many economic agents.

The general fear of deflation is unfounded. Price deflation can be the natural and welcome consequence of growth, it can bring about real cash building, and it can shorten the recession after an artificial boom. Its most unpleasant form is credit contraction deflation, which decreases the money supply; however, that is only possible in a fractional reserve banking system that has previously created money out of nothing. The main effect is a redistribution of the existing wealth in the economy, rather than a necessary decline in general output, as assumed in various arguments.

The fear of deflation is artificially fed by those who benefit from the creation of new money, since they spend the new money first. Banks and government, as well as businesses that depend on a credit expansion boom, fear deflation and profit from the money production they recommend as a prescription against deflation, at the expense of other economic agents who pay higher prices than they otherwise would. By artificially lowering interest rates and distorting the structure of production, it is precisely expansionary monetary policy that triggers the greatest economic disasters and makes credit contraction possible in the first place. In a full reserve commodity money standard, price deflation is completely harmless and the symptom of strong economic growth or successful cash accumulation.

As our analysis shows, the inflationary policies in the years following the Great Recession must be considered a policy error, as they delayed recovery and reduced economic growth, and their price-inflationary consequences became more and more visible. This policy error was based on or justified by a faulty theory of inflation, which we have addressed in this paper by offering what we consider to be a more correct theory.

In a period such as the present that is characterized by strong inflationary pressures, price deflation should not be discouraged. Rather, we suggest the following policy measures:
- Allow productivity growth deflation by nurturing an environment conducive to innovation;
- Allow cash-building deflation, as savings are the necessary means for enhancing a process of sound growth;
- Reduce government spending to reduce the quantity of money in circulation;
- Reforms should be introduced to reinstate the primacy of balanced budgets.

Can government policies that increase the monopoly power of firms and the militancy of unions increase output? This paper shows that the answer is yes under certain “emergency” conditions. These emergency conditions—zero interest rates and deflation—were satisfied during the Great Depression in the United States. The New Deal, which facilitated monopolies and union militancy, was therefore expansionary in the model presented. This conclusion is contrary to a large previous literature. The main reason for this divergence is that this paper incorporates rigid prices and the zero bound on the short-term interest rate. JEL: E23, E32, E52, E62, J51, N12, N42

Unlearning, deskilling and epistemologies of ignorance in the field of contemporary art and its history
Humanistic knowledge in a rapidly changing world is not a cumulative one. Unearning today serves above all to emphasise the aspect of dignity: getting rid of the language that naturalises violence, fruitful in post-dependence, post-colonial or identity studies. However, epistemophilic attitudes most often function in the context of knowledge produced and distributed as an unquestionable economic good. This results, on the one hand, in the reduction of knowledge to pure information with no attention to human relations and respect, and on the other hand, in
authoritative explanation as the imposition of one’s own point of view and power.
Deflationary strategies, including unlearning and deskilling, used to be connected either with a belief in democratisation (everyone can be an artist and take a photograph, and not necessarily paint a picture) or with breaking the usual patterns of creativity (new media have become a real breakthrough also in the way of thinking). Because fragility, weakness and vulnerability were often negatively characterised in modernity, deflationary strategies could play the role of opening up to others and to difference. Today, it can be considered that all counter-hegemonic strategies have been absorbed by the market and liberal capitalism. What
seemed to be associated with collaboration, shared authorship and dialogic exchange turns out to be exploitative, often in relation to the poor periphery: the division of labour makes it possible to hire (for little money) whoever is artisanally proficient and to appropriate their work. In the deflationary tactics recuperated by neoliberalism, the stakes in the game are still power, productivity and brand (authorship).
Today unlearning in the field of art history is no longer just an inspiration to
reflect on knowledge about art, but also to imagine and practice a different way of co-existence with this art. Also when art itself is no longer necessarily art we know and got used to.

Over the past century, the institution of capital and the process of its accumulation have been fundamentally transformed. By contrast, the theories that explain this institution and process have remained largely unchanged. The purpose of this paper is to address this mismatch. Using a broad brush, we outline a new, power theory of capital and accumulation. We use this theory to assess the changing meaning of the corporation and the capitalist state, the new ways in which capital gets accumulated and the specific historical trajectory of twentieth-century capitalism up to the present.

“Deflation is surgery not therapy,” wrote Joseph Dodge in his personal notes, as he mandated “a vigorous and ruthless dose of credit control” for Japan in 1949. This policy, dubbed the Dodge Line, induced a “stabilization panic” and depression. Dodge’s “one-stroke” stabilization plan was conducted by finance minister Ikeda Hayato. The course reversal in US policy reflected an initiative by Wall Street bankers, who now regained a kind of influence they had not had since the 1920s. The result, however, was not the end of Ishibashi Tanzan’s expansive “positive policy” but rather its privatization, now run through the Bank of Japan and the private banks.

The expansionary economic policies of the government and of the central bank (State Bank of Pakistan – SBP), which on one side resulted in impressive economic performance, stimulated a rise in the Consumer Price Index (CPI) on the other. This initiated a debate on the determinants of the recent inflation. Some blamed fiscal policy or monetary policy, while others blamed

La deflación española de la primera mitad del siglo XIX parece ser un punto común generalmente aceptado por los historiadores económicos. Sin embargo, carecemos de estudios que cuantifiquen la intensidad de dicha deflación y la pongan en relación con la experiencia registrada en otros países. Por ello, el objetivo de este trabajo es la elaboración e interpretación de un índice Laspeyres de precios al consumo de Barcelona para el periodo 1775-1844. El ejercicio se divide en dos partes. En la primera nos centraremos en la construcción del IPC. Para ello describiremos e analizaremos la base informativa que hemos empleado en la obtención de datos y, a continuación, expondremos el método de elaboración del índice, así como el contraste de la representatividad del mismo. En la segunda parte, empleando el índice elaborado, analizaremos el proceso deflacionario español de la primer mitad del siglo XIX, siguiendo dos pasos. Primero acotaremos la duración de dicha deflación para, a continuación, medir su intensidad. Por último, para completar el análisis, relativizaremos dicha deflación, es decir, insertaremos la situación española en una comparación de nivel internacional, con el fin de ver si existe una brecha diferencial entre el caso español e internacional.

The purpose of this study is to determine the factors contributing to real exchange rate fluctuations in Kenya; whether the real exchange rate responds more to real or to nominal shocks. A vector autoregression framework is applied in the analysis yielding impulse responses and decompositions of the forecast error variance. The results demonstrate the important role played by real shocks in causing exchange rate fluctuations, in particular highlighting the predominant role played by demand shocks. It is also shown that shocks hitting the Kenyan economy are asymmetric to shocks affecting the US economy. Thus, the Kenyan economy is buffeted by idiosyncratic shocks which are more country specific. Consequently, it can be argued that the exchange rate plays an important role as a shocks absorber in the Kenyan context.