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Price stability is a goal of monetary and fiscal policy aiming to support sustainable rates of economic activity. Policy is set to maintain a very low rate of inflation or deflation . For example, the European Central Bank (ECB) describes price stability as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the Euro ...
The cobweb model or cobweb theory is an economic model that explains why prices may be subjected to periodic fluctuations in certain types of markets.It describes cyclical supply and demand in a market where the amount produced must be chosen before prices are observed.
The rule was proposed in 1992 by American economist John B. Taylor [1] for central banks to use to stabilize economic activity by appropriately setting short-term interest rates. [2] The rule considers the federal funds rate , the price level and changes in real income . [ 3 ]
In economics, the "J curve" is the time path of a country’s trade balance following a devaluation or depreciation of its currency, under a certain set of assumptions. A devalued currency means imports are more expensive, and on the assumption that the volumes of imports and exports change little at first, this causes a fall in the current ...
An evolutionarily stable strategy (ESS) is a strategy (or set of strategies) that is impermeable when adopted by a population in adaptation to a specific environment, that is to say it cannot be displaced by an alternative strategy (or set of strategies) which may be novel or initially rare.
In economics, comparative statics is the comparison of two different economic outcomes, before and after a change in some underlying exogenous parameter. [ 1 ] As a type of static analysis it compares two different equilibrium states, after the process of adjustment (if any).
The primary objective of BSP's monetary policy is to promote price stability because it has the sole ability to influence the amount of money circulating in the economy. In doing so, other economic goals, such as promoting financial stability and achieving broad-based, sustainable economic growth, are given consideration in policy decision-making.
US federal minimum wage if it had kept pace with productivity. Also, the real minimum wage. Real macroeconomic output can be decomposed into a trend and a cyclical part, where the variance of the cyclical series derived from the filtering technique (e.g., the band-pass filter, or the most commonly used Hodrick–Prescott filter) serves as the primary measure of departure from economic stability.