the price of low inflation

《the price of low inflation》由会员上传分享，免费在线阅读，更多相关内容在教育资源-天天文库。

1、ThePriceofLowInflationMuneeshKapurandMichaelDebabrataPatra*Anysocietythatdesirestolowertheinflationratemaysufferoutputlossesintheinterimperiod.Evenindependentcentralbankshavetocontendwithsuchoutputlosses,giventheinertiaininflationexpectationsandcredibilityconstraints.Presentingestimatesof

2、thesacrificeratioforIndia,thispaperarguesthattheslopeoftheaggregatesupplycurveinIndiaisflatteningandthismayraisetheoutputcostsofreiningininflationwhentheupturnofoveralleconomicactivitytakesroot.Accordingly,estimatesofthesacrificeratioaregoingtobecomemorevaluablethanbefore.Alowinflationreg

3、imemayhavecontinuousbenefitswhichmaybeenoughtooffsettheinitialoutputlosses.Thisistherelevanttrade-offthatsocietyfaces:whetherthepresentgenerationiswillingtosuffersomehardshipsforthebenefitsthatwillaccruetofuturegenerations.IntroductionCurrently,inflationinmanypartsoftheworldislowerthaninh

4、alfacentury.Incrisis-affectedAsia,economiescontinuetocontendwithdisinflationandhesitantrecovery.InthelastbastionsofgrowthinAsia-ChinaandIndia-thereisaclearslackeningofmomentum.ConsumerpriceinflationwhichturnednegativeinChinain1998and1999isexpectedtoremainnegativein2002(-0.4percent);inIndi

5、a,year-on-yearchangesinwholesaleprices–theofficialmeasureofinflation–weretrailingalittleabove1percentinearly2002withinflationintermsofmanufacturedproductpricestouchingzero.Overtherestof2002,inflationhasremainedweak,withaverageinflationrateslidingdownwardsfromitslevelayearago.Recentevidenc

6、efromindustrialcountries,particularlyfromtheUSinthe1970s,1980sandearly1990s,suggeststhatdisinflationhasbeenamajorcauseofrecession.Thedecade-longco-existenceofnearzerogrowthandfallingpricesinJapanhasraisedthespectreofdeflationovertheglobaleconomy.Inindustrialcountries,policyinterestratesha

7、veeasedtolevelswhichseemtoindicatethatmonetarypolicyisapproachingazoneofineffectiveness.IntheEuroarea,sentimenthasbeguntoflagandapprehensionsofamoderationinthestrengthoftheanticipatedrecoveryarebeginningtosurface.Thereisthegrowingdangerthatevenifeconomiescontinuetoe