Understanding the disinflations in Australia, Canada and New Zealand using evidence from smooth transition analysis

Article Abstract:

A smooth transition analysis was conducted to study the speed and timing of the disinflation reforms implemented by Australia, Canada, and New Zealand. The alternative approach, which allows price data to determine the process of transition, pointed to central bank independence and the general downturn in the economy in the early 1990s as the major factors in the transition. Other labor market and fiscal policy changes were considered to have less impact since the transitions were already occurring before these alterations were made.

Prices, Analysis, Australia, Canada, Economic policy, Deflation (Finance), Deflation (Economics)

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Using option prices to estimate realignment probabilities in the European Monetary System: the case of sterling-mark

Article Abstract:

Option prices are a good indicator of the risk-neutral probability distribution of future exchange rates. Estimates of the probability of realignment differ from past estimates based on differences in interest rate and sterling's status in the Exchange Rate Mechanism bands. Option prices help central banks identify the initial stages of a crisis considering that interest rate differentials react slowly to speculative pressure.

Prices and rates, Options (Finance)

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Long-run identifying restrictions for an error-correction model of New Zealand money, prices and output

Article Abstract:

The interrelationship among money, prices and output in New Zealand are discussed. Using a variant of a macroeconomic dynamic model developed by Orden and Fisher, it is shown that a sudden change in the monetary situation does not affect long-term output but directly affects prices. A sudden change in productivity, on the other hand, may be caused by a shift in the monetary situation.

Economic aspects, Money

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