However, the inflation bias presence is a typical feature of the system of flat money where the monetary mechanisms are pursued with discretion. Inflation bias exists because of two reasons. First, with the discretionary sovereignty over the monetary policy conduct, nations can fund deficits of the budget by raising the seigniorage cash inflows over the non-inflationary amount. Seigniorage can be part of the maximum tax composition due to the marginal cost of every kind of taxes. To reduce the inflation bias, many nations have opted to give their central banks the legal independence. The paper therefore, analyses and discusses if nations with independent Central Banks also experience a lower inflation. Research Question Most governments and nations impose legal independence on their central banks. Their aim is to cushion the monetary policies from the political interference and from the pressure of electoral to deliver the economic growth at the long term inflationary cost expense. It is always assumed that the legal independence of central banks from the fiscal authority is crucial as it protects the economy from the debt monetization. Therefore, the paper will answer the question if the commitment of the credible government is deemed to have a reduced rate of inflation. Objective Objective 1 The objective of this research is to find out if countries and nations having independent central banks also have a reduced inflation rate. Objective 2 The objective of the research is to determine ways that governments do in order to minimize the inflation bias. Objective 3 The objective of the research is to discuss through the collection and analysis of historical data and illustrating real life scenarios from the European, UK, or American Central banks. Question Interpretation Governments have alternative institutional arrangements which they exercise the monetary policy responsibility. A common arrangement is through independent central banking. The independent central bank is considered as one of the better alternatives for the policy instrument due to their changed in the economic performance. The conventional idea behind the central bank independence is to provide a better monetary policy for the country. The question that has always gone unanswered is if nations that have employed the mechanism of independent central bank experience a lower inflation. The choice between unemployment and inflation is a political choice rather than a technical choice. There is a perspective trade-off between the stabilizing the economy and lowering the inflationary bias. However none of the dimensions have been put into consideration. The inflationary bias evidence has been scarce this is because it requires identifying the inflation rates. Literature Review The independence of central banks has been the conventional mechanism in countries that are developed. For instance, in Europe the nations have confined their powers to surpass the power of central banks through the parliament declaration (“Central Bank Independence and Inflation”, 2013 ). The nuclear option was never implemented, but it led to a greater incentive for the consensus among the official families. The independence of central banks was much stronger in 1990s. New Zealand had an extreme form of central bank independence when the country was the love for free market reformers. The Reserve bank president was appointed to maintain the rate of inflation between zeros
COLLECTION AND ANALYSIS OF HISTORICAL DATA (Author’s name) (Institutional Affiliation) Key words: Inflation Bias, Central Bank Background The willingness of countries to encourage their central banks to print more money, or implement policies that results in an increasing inflation rate over a period of time is called inflation bias…
Some of main effects which can occur on the health of a person due to smoking including heart diseases, mental stroke, altered brain chemistry, graves disease, gum disease, wrinkles, and cancer of the esophagus. “Non-smoking spouses and children are exposed to second-hand smoke, may adopt the same negative behaviors, and often have poor nutrition and diets” (Stritof, n.d.).
The Federal Reserve has taken unprecedented proceedings in the financial markets since the economy was plunged into financial crisis. Remarkable examples consist of lending in excess of $1.5 trillion to monetary institutions and buying almost $1.25 trillion of mortgage-backed securities to make the financial system stable.
The Principal Barriers To Secondary Analysis Of Qualitative Data and Why Researchers Pursue The Approach?
Secondary analysis of data is the investigation by researchers who may not have been involved in the primary data collection. The purpose of such an analysis is also different from the purpose of those who were involved in the original data collection.
The ethnographic method starts with selection of a culture, review of the literature pertaining to the culture, and identification of variables of interest -- typically variables perceived as significant by members of the culture. The ethnographer then goes about gaining entrance, which in turn sets the stage for cultural immersion of the ethnographer in the culture.
The focus in this paper is on the history of American Theatre which begins in the post-Civil War period, weaving its way through the development of American theater through 1945 and well into the twenty-first century. However, it is mentioned that between 1870 to 1920 the theater experienced its most dramatic change in the United States.
This they do by lowering the activation energy and once the reaction starts going, it runs on its own. This is facilitated by the formation of enzyme-substrate complex. The main theory for the formation of enzyme-substrate-complex is called lock and
then planned to investigate and evaluate the effects of similar and dissimilar interspersed task in relation to children with autism or developmental delays learning object labels. The authors then conducted a set of analyses using a reinforcer. The reinforcer was given for
The software then uses audit capability to store, retrieve and analyze data. As real data consists of formats that can be used for statistical analysis, it is increasingly being preferred over nominal data. A very good example of
In fact, Liang wanted to become an engineer as his childhood fantasies were full of military artillery that ranged from weapons, ships, submarines, airplanes. Nonetheless, the purge by Mao led Liang to artwork that mainly consisted of Mao and Chinese workers.
This is majorly as a result of the rate at which businesses are going global currently. Because these policies are always national, different countries usually have different foreign policies. This can be because of
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