Wage-price dynamics : are they consistent with cost push?

Wages ; Inflation (Finance)

Recursive Competitive Equilibrium

In this article we define a Recursive Competitive Equilibrium, provide an example and review the related literature. The article is an entry prepared for The New Palgrave: A Dictionary of Economics, 2nd Edition (Palgrave Macmillan: New York).

Conflict in Cross Border Mergers Effect of Firm and Market Size

This paper tries to analyze the interrelationship between possibilities of conflict in cross border mergers and acquisitions and firm and market characteristics in a two country three firm model. We show that in general an increase in asymmetry across firms reduces the possibility of conflict between jurisdictions over merger review decisions. We also show that possibility of conflict increase with the increase in market asymmetries across countries. We also discuss interaction of asymmetry in firm and market size with the distribution of firms across countries and its effect on the possibilities of conflict.conflict, Cross border mergers, firm size, Market Size

Survey measures of expected inflation : revisiting the issues of predictive content and rationality

Inflation (Finance) ; Consumer price indexes

Inflationary expectations, money growth, and the vanishing liquidity effect of money on interest : a further investigation

Market participants recognize two opposing effects of money supply growth on interest rates: a temporary liquidity effect and a permanent expectations effect. That the latter dominates in the long run is clear—a sustained increase in money growth causes proportionally higher interest rates due to a rise in inflationary expectations. In the short run, however, this interest-raising expectations effect is to some degree offset by the interest-lowering liquidity effect as monetary acceleration initially gluts the market for money balances. Depending on the relative strengths of these two opposing forces, increased money growth may lower interest rates for a while. In the second article in this Review, “Inflationary Expectations, Money Growth, and the Vanishing Liquidity Effect of Money on Interest: A Further Investigation,” Yash Mehra examines the historical response of interest rates to changes in money growth and finds that the pattern of response has changed substantially over time. During the ‘50s and ‘60s, accelerations in money growth significantly lowered interest rates in the short run through the liquidity effect. In the ‘70s, however, the liquidity effect was no longer significant. Triggered by high and variable rates of inflation, inflationary expectations became more responsive to changes in money growth and the expectations effect began to dominate the liquidity effect even in the short run. As a result, the temporary lowering of interest rates following an acceleration of money growth is now shorter lived and less pronounced than it was during the ‘50s and ‘60s.Money