Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean

The paper investigates asymmetry in the allocation of aggregate demand shocks between real output growth and price inflation over the business cycle in a sample of fifteen Caribbean countries. In most countries, the evidence indicates the existence of a kinked supply curve, which implies that positi...

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Detalles Bibliográficos
Autor principal: Magda Kandil
Formato: Artículo científico
Publicado: Centro de Investigación y Docencia Económicas, A.C. 2009
Materias:
Economía y Finanzas
Keywords
kinked supply curve
inflation and contractions biases
Caribbean evidence
Acceso en línea:http://www.redalyc.org/articulo.oa?id=32312003002
http://biblioteca.clacso.edu.ar/gsdl/cgi-bin/library.cgi?a=d&c=mx/mx-010&d=32312003002oai
Aporte de:
Red de Bibliotecas Virtuales de Ciencias Sociales (CLACSO) de Consejo Latinoamericano de Ciencias Sociales
id I16-R122-32312003002oai
record_format dspace
institution Consejo Latinoamericano de Ciencias Sociales
institution_str I-16
repository_str R-122
collection Red de Bibliotecas Virtuales de Ciencias Sociales (CLACSO)
topic Economía y Finanzas
Keywords
kinked supply curve
inflation and contractions biases
Caribbean evidence
spellingShingle Economía y Finanzas
Keywords
kinked supply curve
inflation and contractions biases
Caribbean evidence
Magda Kandil
Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean
topic_facet Economía y Finanzas
Keywords
kinked supply curve
inflation and contractions biases
Caribbean evidence
description The paper investigates asymmetry in the allocation of aggregate demand shocks between real output growth and price inflation over the business cycle in a sample of fifteen Caribbean countries. In most countries, the evidence indicates the existence of a kinked supply curve, which implies that positive demand shocks feed predominantly into prices while negative demand shocks mainly affect output. This suggests that the high variability of aggregate demand in Caribbean countries, frequently exposed to shocks, tends to create an upward bias on inflation and a downward bias on real output growth, on average, over time. The analysis highlights the benefits of eliminating structural rigidities responsible for the kinked nature of the supply curve, and points to the dangers of pro-cyclical macroeconomic policies.
format Artículo científico
Artículo científico
author Magda Kandil
author_facet Magda Kandil
author_sort Magda Kandil
title Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean
title_short Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean
title_full Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean
title_fullStr Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean
title_full_unstemmed Does Demand Volatility Lower Growth and Raise Inflation? Evidence from the Caribbean
title_sort does demand volatility lower growth and raise inflation? evidence from the caribbean
publisher Centro de Investigación y Docencia Económicas, A.C.
publishDate 2009
url http://www.redalyc.org/articulo.oa?id=32312003002
http://biblioteca.clacso.edu.ar/gsdl/cgi-bin/library.cgi?a=d&c=mx/mx-010&d=32312003002oai
work_keys_str_mv AT magdakandil doesdemandvolatilitylowergrowthandraiseinflationevidencefromthecaribbean
bdutipo_str Repositorios
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