Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
After an oil price shock was impacted upon the other five variables in the model, many interesting results were found.
I have already demonstrated that oil Granger causes inflation, therefore it is expected that after a shock was applied to the oil price statistic, inflation would respond. The middle right graph from Fig. 4.4 depicts the response of inflation to an oil price shock, with the analytical two-standard-error bands. Certain characteristics of the response should be noted as they are crucial in understanding the problem of the project. Firstly, for the first four quarters, it can be seen that after a shock, the inflation rate rises rather steeply by approx. 0.5. This means that in the immediate aftermath of an oil price shock, the UK inflation rate will respond by increasing. The level of inflation reaches the maximum point at the third quarter. This shows that in the short run, the impact of an oil price shock to inflation is significantly negative. Secondly, inflation then calms and reduces through the next 8-10 quarters as the shock has been absorbed by the economy, and when the oil price decreases and stabilises, inflation decreases commensurately.Finally, it can be seen that inflation will return to its normal trend pattern 20 quarters after the initial shock. Whilst this may seem surprising, the result supports the business cycle theory, that over a five year period, an economy is likely to see peaks and troughs in its macroeconomic variables. This result follows economic theory, that due to its price inelasticity (Cooper 2003) and importance to the UK economy, should a shock be impacted upon oil prices, consumption of oil will not significantly drop, resulting in a form of cost-push inflation.
with reference to incidence of taxation, explain with the help of a diagrams, who bears the incidence of taxation when the demand for a commodity is (i)perfectly inelastic (ii) uni
Suppose that the U.S. Department of Agriculture (USDA) administers the price floor for cheese, set at $0.17 per pound of cheese. (The price floor is officially set at $16.10 per hu
Compute the following probabilities a) If Y is distributed N(1,4) find Pr(y ? 3) b) If Y is distributed N(3,9) find pr(y>0) c) If Y is distributed N (50,25) find pr(40?Y?5
how adverse selection has an impact on financial crisis
Derivation of Indifference Curve: Consider any commodity bundle denoted by point A in the above figure which consist x 0 1 and x 0 2 amount of good I and good II respectiv
I am writing a research paper for my macroeconomics class and I am having trouble with it. I am writing on the topic of the monetary policy and i can''t seem to understand a few th
Fiscal policy is the program of government’s with respect to the amount and composition of (i) expenditure: the purchase of commodities and services, and spending in the form of su
effects of real wage existing in the market that is lower than the equlibrium real wage.what will happen in this labour market if it is perfectly competitive
Trade-FDI Nexus: Economic liberalization promotes both trade and FDI. FDI could be export-promoting, import substituting or import enhancing depending upon supply and demand f
Kate uses a sewing machine to alter and repair clothes for one year in her own small business, Kate's Tailoring. She earns $20,000 during the year for various sewing projects. In t
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd