Does Demand Volatility Lower Growth and Raise Inflation?: Evidence from the Caribbean
The paper investigates asymmetry in the allocation of aggregate demand shocks between real output growth and price inflation over the business cycle in a sample of fifteen Caribbean countries. In most countries, the evidence indicates the existence of structural constraints, implying that positive d...
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Format: | Elektronisch E-Book |
Sprache: | English |
Veröffentlicht: |
Washington, D.C
International Monetary Fund
2014
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Schriftenreihe: | IMF Working Papers
Working Paper No. 14/67 |
Online-Zugang: | UBW01 UEI01 LCO01 SBR01 UER01 SBG01 UBG01 FAN01 UBT01 FKE01 UBY01 UBA01 FLA01 UBM01 UPA01 UBR01 FHA01 FNU01 BSB01 TUM01 Volltext |
Zusammenfassung: | The paper investigates asymmetry in the allocation of aggregate demand shocks between real output growth and price inflation over the business cycle in a sample of fifteen Caribbean countries. In most countries, the evidence indicates the existence of structural constraints, implying that positive demand shocks feed predominantly into prices while negative demand shocks mainly affect output. The high variability of aggregate demand in Caribbean countries, frequently exposed to shocks that are exacerbated by pro-cyclical policy stance, tends to create an upward bias on inflation and a downward bias on real output growth, on average, over time. The analysis highlights the benefits of eliminating structural rigidities responsible for asymmetric real and inflationary effects and points to the dangers of procyclical macroeconomic policies that exacerbate the adverse effects of demand variability |
Beschreibung: | 1 Online-Ressource (34 p) |
ISBN: | 1484359674 9781484359679 |
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spelling | Kandil, Magda E. Verfasser aut Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean Kandil, Magda E Washington, D.C International Monetary Fund 2014 1 Online-Ressource (34 p) txt rdacontent c rdamedia cr rdacarrier IMF Working Papers Working Paper No. 14/67 The paper investigates asymmetry in the allocation of aggregate demand shocks between real output growth and price inflation over the business cycle in a sample of fifteen Caribbean countries. In most countries, the evidence indicates the existence of structural constraints, implying that positive demand shocks feed predominantly into prices while negative demand shocks mainly affect output. The high variability of aggregate demand in Caribbean countries, frequently exposed to shocks that are exacerbated by pro-cyclical policy stance, tends to create an upward bias on inflation and a downward bias on real output growth, on average, over time. The analysis highlights the benefits of eliminating structural rigidities responsible for asymmetric real and inflationary effects and points to the dangers of procyclical macroeconomic policies that exacerbate the adverse effects of demand variability Online-Ausg http://elibrary.imf.org/view/IMF001/21285-9781484359679/21285-9781484359679/21285-9781484359679.xml Verlag URL des Erstveröffentlichers Volltext |
spellingShingle | Kandil, Magda E. Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean |
title | Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean |
title_auth | Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean |
title_exact_search | Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean |
title_exact_search_txtP | Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean |
title_full | Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean Kandil, Magda E |
title_fullStr | Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean Kandil, Magda E |
title_full_unstemmed | Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean Kandil, Magda E |
title_short | Does Demand Volatility Lower Growth and Raise Inflation? |
title_sort | does demand volatility lower growth and raise inflation evidence from the caribbean |
title_sub | Evidence from the Caribbean |
url | http://elibrary.imf.org/view/IMF001/21285-9781484359679/21285-9781484359679/21285-9781484359679.xml |
work_keys_str_mv | AT kandilmagdae doesdemandvolatilitylowergrowthandraiseinflationevidencefromthecaribbean |