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Wednesday, July 15, 2020 | History

2 edition of Credibility effects of price controls in disinflation programs found in the catalog.

Credibility effects of price controls in disinflation programs

Pierre-Richard AgГ©nor

Credibility effects of price controls in disinflation programs

by Pierre-Richard AgГ©nor

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Published by International Monetary Fund in Washington, D.C .
Written in English


Edition Notes

Includes bibliographical references.

Statementprepared by Pierre-Richard Agénor.
SeriesIMF working paper -- WP/92/83
ContributionsInternational Monetary Fund. Research Dept.
The Physical Object
Paginationii, 17 p. ;
Number of Pages17
ID Numbers
Open LibraryOL17900944M

This article examines the effects of disinflation on economic activity in countries characterized by chronic inflation. Such countries have a long history of inflation at rates exceeding those in industrial countries as well as labor and capital markets that have adjusted to . However, most economists applaud the "Volcker disinflation" of the s. Source: Reuters, "Fed's Kocherlakota Sees Risk of U.S. Disinflation," New York Times, Ap Disinflation might have been a good thing in the s, but worrisome in , because.

  Price controls can take the form of maximum and minimum prices. They are a way to regulate prices and set either above or below the market equilibrium: Maximum prices can reduce the price of food to make it more affordable, but the drawback is a maximum price . Welcome to our website Online Book & PDF Database where you can Download or Read Online PDF Books. Get Ana Mendieta Full Book by Ana Mendieta, Gloria Moure, Donald Burton Kuspit. Credibility Effects of Price Controls in Disinflation Programs. Spanish: Programmatic Course. Search for: Recent Posts.

Rent control was another factor. In order to have an effect, the rent level must be below that which would otherwise prevail, because controls prevent rents that attain market clearing levels and shortages result. Many economists agree that rent controls are destructive. With war came the rationing of food and more price controls. Column - On 9 October , the government announced the introduction of price controls for basic commodities to cushion the poor. The measures, effected through the publication of Statutory.


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Credibility effects of price controls in disinflation programs by Pierre-Richard AgГ©nor Download PDF EPUB FB2

This paper examines whether price controls may enhance the credibility of a disinflation program. The analysis indicates that a partial price freeze may paradoxically lead to inflation inertia.

The authorities may determine optimally the intensity of price controls so as to minimize the policy loss associated with a discretionary monetary by: 4. This paper examines whether price controls may enhance the credibility of a disinflation program, using a framework in which agents behave strategically.

The analysis indicates that a partial price freeze is not fully credible, and may result in inflation : Pierre-Richard Agénor. Agenor, Pierre-Richard, "Credibility effects of price controls in disinflation programs," Journal of Macroeconomics, Elsevier, vol.

17(1), pages Handle. The latest in a series of papers published by the International Monetary Fund on economies in transition examines the experience of disinflation in Central and Eastern Europe, the Baltics, Russia, and other countries of the former Soviet Union between and The paper reviews the economic policies underlying the dramatic drop in inflation during those years as well as other variables.

We study the effects of a credible, gradual exchange rate based disinflation program in a two sector economy. After an initial real exchange rate depreciation, the reductions in the rate of devaluation reduce the monetary wedge generated by a cash in advance constraint, leading to a gradual increase in absorption that yields progressive real exchange rate appreciations and current account.

Price controls and asset prices during disinflation programs Since the marginal utility of wealth, A, depends on current and future prices, price controls have a direct impact on it.

But since A in turn has a direct impact on both interest rates and the stock market, price controls have an important influence on asset prices too. "Credibility effects of price controls in disinflation programs," Journal of Macroeconomics, Elsevier, vol.

17(1), pages Jensen, Henrik, " Uncertainty in interdependent economies with monopoly unions," Journal of Macroeconomics, Elsevier, vol. 15(1), pages   Journal of Development Economics 29 () North-Holland COMMENTS ON Monopolistic Competition, Credibility and the Output Costs of Disinflation Programs: An Analysis of Price Controls by Sweder van Wijnbergen Raul RAMOS TERCERO Banco de Mexico, Mexico, D.F., Mexico Having searched myself through the literature on the macroeconomic effects of price controls.

Critics argue that Greenspan should have increased the money supply to lower house price inflation. Critics argue that Greenspan should have tried to control the rise in AD by reducing the money supply. Critics argue that Greenspan should have put a cap on home values.

Lack of credibility is then shown to lead to output losses during a disinflation program. We demonstrate the effects of price controls and show that their temporary use can be defended on welfare grounds.

The paper analyzes asset price behavior during disinflation programs with and without price controls and the influence of credibility problems. We conclude that when appreciation and deficits are due to supply-side rigidities, rather than to credibility and/or price stickiness, no further policies (i.e., capital controls, incomes policies.

"Credibility effects of price controls in disinflation programs," Journal of Macroeconomics, Elsevier, vol. 17(1), pages Gürbüz Beşek, Yeşim, " Crédibilité en matière de ciblage d'inflation," GIAM Working PapersGalatasaray University Economic Research Center, revised 08 Feb Designing Disinflation Programs in Transition Economies: The Implications of Relative Price Adjustment.

Although many transition economies have succeeded in lowering inflation from very high to moderate levels of about 20–40 percent annually, there has been limited success in reducing inflation to low levels in the region of 10 percent a year.

The fact that successful disinflation requires credibility explains why the Fund could play a key role in backing up disinflation programs in developing countries: in these countries, in which acquiring credibility through the mere announcement of traditional inflation anchors (the money supply, the exchange rate) is comparatively more.

(1) The recessionary effects associated with disinflation appear in the early stages of money-based programs but only in the late stages of exchange rate-based programs. (2) Lack of credibility is.

Book review Full text access Macroeconomic linkage: Savings, exchange rates, and capital flows: Takatoshi Ito and Anne O. Krueger. Chicago, IL: The University of Chicago Press, pp.

$ ISBN Page Download PDF. • Credibility: a rapid disinflation (and resulting sharp rise in unemployment) may be more effective way to gain credibility and reduce inflation expectations. If so, rapid disinflation results in lower sacrifice ratio. • Staggered contracts: a gradual disinflation allows more time for contracts to be reset before disinflation occurs.

This paper studies the interactions between electoral considerations and the imposition of price controls by opportunistic policymakers.

The analysis shows that a policy cycle emerges in which price controls are tightened in periods leading to the election, and relaxed immediately afterwards. Wage and price controls have a long and somewhat disreputable history, presumably because of their frequent use in many countries as short run substitutes for measure~ with more lasting effects on.

Analyzing Credibility in High-Inflation Countries: A New Approach. with Mark Taylor |Published Version| March Price Controls and Electoral Cycles. with Carlos M. Asilis |Published Version| February Credibility Effects of Price Controls in Disinflation Programs |Published Version| Winter Testing for Credibility Effects.

with. A price control comes in two flavors: a price ceiling, where the government mandates a maximum allowable price for a good, and a price floor, in which the government sets a minimum price, below which the price is not allowed to fall.

Price controls can be thought of as "binding" or "non-binding." A non-binding price control is not really an. Policymakers continue to propose price controls as a means to reduce the high cost of drugs. Speaker Pelosi's plan (H.R. 3) is the latest example.

History shows that price controls .Lack of credibility is then shown to lead to output losses during a disinflation program. The paper analyses asset price behavior during disinflation programs with and without price controls and.