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Aggregate Supply (aggregate + supply)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

Monetary Policy, Credit and Aggregate Supply: The Evidence from Italy

ECONOMIC NOTES, Issue 3 2002
Riccardo Fiorentini
This paper concerns theory and evidence of the monetary transmission mechanisms. Current research has deeply investigated factors, such as dependence of firms on bank credit, that amplify the impact of monetary policy impulses on aggregate demand exerting strong but temporary effects on output and employment. We present an intertemporal macroeconomic equilibrium model of a competitive economy where current production is financed by bank credit, and then we use it to identify supply,side effects of the credit transmission mechanism in data drawn from the Italian economy. We find evidence that the ,credit variables' identified by the model , the overnight rate as a proxy of monetary policy and a measure of credit risk , have permanent effects on employment and output by altering credit supply conditions to firms. To save on space, mathematical proofs, statistical tests and data sources have been gathered in two separate appendices that can be examined on request. (J.E.L.: E2, E5). [source]

Exchange Rates and Prices: Sources of Sterling Real Exchange Rate Fluctuations 1973,94

OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 4 2000
Mark S. Astley
We attempt to identify the sources of UK exchange rate and relative consumer price fluctuations by applying the Clarida and Gali (1994) extension of the Blanchard and Quah (1989) structural VAR method to UK data. We (r)nd that IS shocks underlay the majority of the variance of sterling real and nominal exchange rates. Aggregate supply (AS) shocks were the second most important source of such variations, while LM shocks played an extremely limited role. In contrast, the variance of UK relative consumer prices primarily reflected LM shocks. [source]

Estimating structural macroeconomic shocks through long-run recursive restrictions on vector autoregressive models: the problem of identification

INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, Issue 3 2004
Mark P. Taylor
Abstract We demonstrate that a popular method of estimating underlying structural macroeconomic shocks and their impulse,response functions through recursive long-run structural restrictions on a vector autoregressive representation is not uniquely identified. We show, however, that it may be possible to infer additional qualitative restrictions to achieve identification. We illustrate with two applied examples, corresponding to a simple aggregate supply,aggregate demand framework for the USA and to a stochastic Mundell,Fleming,Dornbusch framework for the USA and Japan. The second example also illustrates how over-identifying restrictions of the underlying framework may be examined informally. Copyright © 2004 John Wiley & Sons, Ltd. [source]

Leaning into the Wind: A Structural VAR Investigation of UK Monetary Policy,

OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 5 2005
Andrew Mountford
Abstract This paper adapts Uhlig's [Journal of Monetary Economics (2005) forthcoming] sign restriction identification methodology to investigate the effects of UK monetary policy using a structural vector autoregression (VAR). It shows that shocks which can reasonably be described as monetary policy shocks have played only a small role in the total variation of UK monetary and macroeconomic variables. Most of the variation in UK monetary variables has been due to their systematic reaction to other macroeconomic shocks, namely non-monetary aggregate demand, aggregate supply, and oil price shocks. We also find, without imposing any long run identifying restrictions, that aggregate supply shocks have permanent effects on output. [source]

THE AGRICULTURAL TERMS OF TRADE IN BANGLADESH: AN ECONOMETRIC ANALYSIS OF TRENDS AND MOVEMENTS, 1952,2006

AUSTRALIAN ECONOMIC PAPERS, Issue 1 2008
AKHAND AKHTAR HOSSAINArticle first published online: 21 APR 200
This paper investigates the trends and movements of agricultural prices, industrial prices and the agricultural terms of trade in Bangladesh with annual data for the period 1952,2006. The ADF and KPSS tests results suggest that both agricultural and industrial prices have a unit root while the agricultural terms of trade is trend-stationary. These results remain unchanged if allowance is made in the unit root test for the possibility of a structural break during 1971,1975 (when Bangladesh gained independence from Pakistan and experienced economic shocks) by applying the two-step procedure of Perron (1989). A simple Nerlovian agricultural price determination model is specified within the framework of aggregate demand and aggregate supply. The Johansen cointegration test results for the periods 1953,2006 and 1973,2006 suggest that there exists a cointegral relationship between agricultural prices, industrial prices, per-capita real income and the real exchange rate between the Bangladeshi taka and the US dollar under the restriction that per-capita real income and the real exchange rate are ,long-run forcing variables' in the sense of Pesaran and Shin (1995), and Pesaran, Shin and Smith (1996). The paper estimates a four-variable vector error-correction (VEC) model and conducts an impulse response analysis for the post-independence period, 1973,2006. [source]

COMPARATIVE ANALYSIS OF EXCHANGE RATE APPRECIATION AND AGGREGATE ECONOMIC ACTIVITY: THEORY AND EVIDENCE FROM MIDDLE EASTERN COUNTRIES

BULLETIN OF ECONOMIC RESEARCH, Issue 1 2008
Magda Kandil
F31; F40; F41; F43 ABSTRACT The paper examines the effects of exchange rate depreciation on real output and price in a sample of 11 developing countries in the Middle East. The theoretical model decomposes movements in the exchange rate into anticipated and unanticipated components. Unanticipated currency fluctuations determine aggregate demand through exports, imports, and the demand for domestic currency, and determine aggregate supply through the cost of imported intermediate goods. The evidence indicates that the supply channel attributed to anticipated exchange rate appreciation results in limited effects on output growth and price inflation. Consistent with theory's predictions, unanticipated appreciation of the exchange rate appears more significant with varying effects on output growth and price inflation across developing countries. [source]