2.5. Limitations of the study

At the level of the limitations, these refer to the usage of secondary information, as opposed to the collection of primary data through the direct analysis of the Chinese market. This limitation is nevertheless addressed through the integration of multiple sources of valid and verifiable information, leading as such to the creation of solid, relevant and reliable findings.

The second limitation is one common to all research endeavors, namely the inability of the research project to answer all questions related to the topic under assessment. These topics could however constitute grounds for future research projects, supporting as such the academic development. These questions refer to the following:

1. What are the history, evolution and importance of inflation and unemployment?

2. What are the characteristics of the Phillips curve in other global regions, such as the United States or Japan?

3. The Phillips curve in China is scattered and inconsistent and…...

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References:

Arnold, R.A., 2008, Economics, 9th edition, Cengage Learning, ISBN 0324595425

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" 2 Apr. 2004. Federal Reserve Bank of San Francisco. Retrieved November 21, 2006 from Web site: http://www.frbsf.org/publications/economics/letter/2004/el2004-08.html
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Svensson, Lars E.., "Escaping from a Liquidity Trap and Deflation: The Foolproof Way and thers." Dec. 2003. Retrieved November 21, 2006 from Web site: http://www.princeton.edu/svensson/papers/jep2.pdf

Inflation." Encyclopedia of American History. Retrieved November 21, 2006 from Web site: http://www.answers.com/topic/inflation

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Hormats, Robert D. "vershoot? Behind the Curve? r Just Right?" The International Economy Fall 2005. Retrieved November 21, 2006 from Web site: http://www.findarticles.com/p/articles/mi_m2633/is_4_19/ai_n16057673

il, Hurricanes, and the U.S. Economy." 13 ct. 2005. The Vanguard Group. Retrieved November 21, 2006 from Web site: http://global.vanguard.com/international/hEurEN/research/hurricaneEN.htm#ref3

Svensson, Lars E.., "Escaping from a Liquidity Trap and Deflation: The Foolproof Way and thers." Dec. 2003. Retrieved November 21, 2006 from Web…...

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Svensson, Lars E.O., "Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others." Dec. 2003. Retrieved November 21, 2006 from Web site:  http://www.princeton.edu/svensson/papers/jep2.pdf 

Moore, Geoffrey H., "Recessions." The Concise Encyclopedia of Economics. Retrieved November 21, 2006 from Web site:  http://www.econlib.org/LIBRARY/Enc/Recessions.html

Conclusions
There is no generally accepted theory of inflation. The causes that
generate it are numerous and include economic, psychological, social,
political, internal, and external factors. Inflation is based on numerous
partial causes, which correlated determine the inflationist process.
Inflation is generally considered an unbalance between money and
goods, consisting in the existence of excessive money supply in relation
with the volume of goods subjected to transactions, resulting an excess of
unsatisfied total demand.
Given the processes that determine it, inflation can be generated
through demand, supply, or it can be structural. Inflation can be generated
by a global demand increase, if the supply is inelastic. The money supply
increases faster than the GDP, causing inflation.

eference list:
1. Inflation (2008). Webster's Online Dictionary. etrieved
December 5, 2008 from http://www.websters-online-
dictionary.org/definition/inflation.
2. Inflation (2008). The American Heritage Dictionary of the
English Language. Fourth Edition. etrieved December 5, 2008
from http://www.bartleby.com/61/14/I0131400.html.
3. Inflation (2008). InvestorWords. etrieved December 6, 2008
from http://www.investorwords.com/2452/inflation.html.
4. Consumer Price Index (2008). Bureau of Labor Statistics.
etrieved December 6, 2008…...

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Reference list:

1. Inflation (2008). Webster's Online Dictionary. Retrieved

December 5, 2008 from

dictionary.org/definition/inflation.

2. Inflation (2008). The American Heritage Dictionary of the

English Language. Fourth Edition. Retrieved December 5, 2008

from  http://www.bartleby.com/61/14/I0131400.html .

3. Inflation (2008). InvestorWords. Retrieved December 6, 2008

from  http://www.investorwords.com/2452/inflation.html .http://www.websters-online-

"..most importantly, we find that inflation has a dramatic negative impact on the profitability of banks." (2006) oyd and Champ additionally state that: "The world has seen a dramatic decline in inflation rates in recent decades, but concerns about inflation may still be warranted, especially in some countries. Evidence is mounting that inflation is harmful to economic activity even at fairly modest rates of inflation because of the way it adversely affects the banking sector and investment." (2006) In the private sector "high interest rates have their most dramatic impact on equity investments - both stock market and private." (Understanding Inflation: So What's to Worry About, Anyway?, 2006) Additionally stated is that: "High interest rates show their effects by: (1) direct competitor for the investor's dollar. y increasing the difficulty of raising equity capital, high interest rates directly undermine financial stability and slow the growth of economic capacity needed to…...

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Bibliography

Understanding Inflation: So, What's to Worry About, Anyway? (2004) FutureCasts Online Magazine. Vol. 6 No. 2. 2004, February 1. Online available at  http://www.futurecasts.com/Understanding%20Inflation.html .

Boyd, John H. And Champ, Bruce (2006) Inflation, Banking and Economic Growth - Federal Reserve Bank of Cleveland. 15 May 2006. Online available at  http://www.clevelandfed.org/research/com2006/0515.pdf .

Inflation (2006) Wikipedia Encyclopedia Online available at  http://en.wikipedia.org/wiki/Inflation .

Federal Reserve Board (2006) Wikipedia Encyclopedia Online available at  http://en.wikipedia.org/wiki/Federal_Reserve_Bank

The clarification of the timeframe before the inflation will return to the level that has been targeted following the shock of employment rate shifts is "the horizon of the policy rule." (McDonald, nd; 73) Inflation rates grew for two years while interest rates were rising and yet unemployment was lowering during this time. In the United States, it can be noted as well that while unemployment rates grew inflation rates fell. Monetary policy and inflation targeting are similar in the United States and Australia.
SUMMARY

ecause employment rates do impact inflationary rates during times of change and in times specifically when unemployment rates rise it is necessary specifically during these times to inform the public through clear policy and expectations as to what is expected thereby cushioning the shock of the impacts of unemployment on inflation rates. There has however, been research reviewed in this study that shows that use of…...

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Bibliography

Barro, R.J. And D.B. Gordon (1983), 'A Positive Theory of Monetary Policy in a Natural Rate

Model', Journal of Political Economy, 91(4), pp. 589-610.

Crosby, M. And N. Olekalns (1996), 'Inflation, Unemployment and the NAIRU in Australia',

Melbourne Institute Working Paper Series No. 7/97.

The Federal Reserve should be able to control and measure the demand and supply on the market and correlate the two indexes. Also, and probably most importantly, the Reserve should constantly supervise and regulate the monetary system, assuring correspondence between the amount of money in coins and bills on the market and their coverage in gold and in the total quantity of goods and services produced.

The economic practice has concluded that a common and rather successful technique in diminishing the negative effects of inflation is to deliberately induce deflation and vice-versa.

However, applying these techniques into the economic and social system raises several difficulties for the Federal Reserve. These difficulties generally reside in economic and social factors. The economic factor is represented by the continuously changing and evolving production technologies, increasing demands, cost and revenues which are almost impossible to foresee or control. Moreover, the social factor of the Federal Reserve's…...

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Lipsey, Richard G., Chrystal, Alec K., Possitive Economy, Chapter 10: Inflation, Published by Weidenfeld & Nicolson in September 1989

Yam, Joseph, Deflation (1): Causes, Economic Forum, Hong Kong Monetary Authority, November 14, 2002,   last accessed on November 24, 2006http://www.tdctrade.com/econforum/hkma/hkma021102.htm ,

Barol, David, Effects of deflation on stock market performance, Physician's News Digest, June 1999,   last accessed on November 24, 2006http://www.physiciansnews.com/finance/699.html ,

Inflation Data, What is Deflation, 2004

Further, inflation typically means higher interest rates are on their way (Walden and Williams). Of course, higher interest rates may it more expensive to borrow money and may limit investment.
As the graph on the next page shows, inflation is returned to the U.S. In 2007 after a long period of relative price stability. Further, many are concerned that future inflation will be high after all the government spending to get the economy back on track and to bail out troubled companies. Therefore, we may also get to experience first had why inflation is bad for savers, wage earners, production and productivity.

INFLATION

IN PER CENT)

SOURCE: ank for International Settlements

ibliography

ank for International Settlements. Financial deleveraging, inflation and risks to global growth. http://www.bis.org/speeches/sp080623.pdf

South African Reserve ank. Why is inflation bad? http://www.bis.org/speeches/sp080623.pdf

Walden, M. And Williams, S. Why is inflation bad? http://www.ncsu.edu/project/calscommblogs/economic/archives/2006/07/why_is_inflatio.html...

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Bank for International Settlements. Financial deleveraging, inflation and risks to global growth.  http://www.bis.org/speeches/sp080623.pdf 

South African Reserve Bank. Why is inflation bad?

Inflation also influences the behavior of company's employees by cutting on their purchasing power. In this way, the employees can acquire less products and services than they were able in the past, therefore reducing their standard of living and enhancing their disappointment. The disappointment can have repercussion within their activity within the ExxonMobil Corporation, so this situation can be characterized as being a sensible one.

Conclusion

Inflation is a negative macroeconomic phenomenon that distorts the economic behavior of both corporations and individuals. Measures have to be taken in order to solve this issue, so as to limit the impact of inflation on everyday operations of companies and ordinary activities of individuals.

ibliography

1) 'Inflation outpacing growth', article on SmartMoney web site, article published by Igor Greenwald, dated on 28th of April 2005 http://www.smartmoney.com/bn/index.cfm?story=20050428085819

2) http://online.wsj.com/article/S116537283751041900.html?mod=opinion_main_commentaries" "Irrational Exuberance, reconsidered," "Wall Street Journal Online," retrieved April 8, 2006...

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Bibliography

1) 'Inflation outpacing growth', article on SmartMoney web site, article published by Igor Greenwald, dated on 28th of April 2005  http://www.smartmoney.com/bn/index.cfm?story=20050428085819 

2)   "Irrational Exuberance, reconsidered," "Wall Street Journal Online," retrieved April 8, 2006http://online.wsj.com/article/SB116537283751041900.html?mod=opinion_main_commentaries "

The states in the Old Continent ensured stable economies and lack of inflation, but the lesson was short-lived. It as such only lasted up until the 1920s, when Germany used printed money to finance its war losses (Palairet, 2000).
3.2. Hyperinflation in Germany

The case of hyperinflation in Germany is the most common one offered as example, yet, it is not the most dramatic hyperinflation episode in economic history. The hyperinflations in Hungary or Zimbabwe are more dramatic, but Germany constituted the first important hyperinflation and has since then captured the attention of the economists (Full Wiki).

It is generally stated that Germany created hyperinflation to pay for its war reparations, as demanded under the Treaty of Versailles. Other opinions however argue that hyperinflation commenced before the war, with the federal decision to use debt to finance the war, rather than increase taxation. The underlying logic was that the country would win…...

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Allen, L., 2009, the encyclopedia of money, 2nd edition, ABC-CLIO

Lira, G., 2010, How hyperinflation will happen in America, Business Insider,   last accessed on December 16, 2010http://www.businessinsider.com/how-hyperinflation-will-happen-in-america-2010-9 

Mayer, T., 2008, U.S. dollar in hyperinflation, Run to Gold,   / last accessed on December 16, 2010http://www.runtogold.com/2008/08/us-dollar-in-hyperinflation 

Salemi, M.K., Hyperinflation, the Concise Encyclopedia of Economics,   last accessed on December 16, 2010http://www.econlib.org/library/Enc/Hyperinflation.html 

Inflation Tutorial" by Investopedia. Generally, this article seeks to give a concise and clear definition of inflation while highlighting how the measurement of the same takes place and how it impacts upon interest rates and investments. In Investopedia's opinion, "inflation is defined as a sustained increase in the general level of prices for goods and services" (2). Hence an increase in the rate of inflation makes money gradually lose its purchasing power. It is important to note that over time, a number of theories and explanations have been put forward in an attempt to highlight the causes of inflation. These theories include demand-pull inflation and the cost-pull inflation theories (Investopedia 2). hen it comes to the measurement of inflation, the same is basically measured in terms of annual percentage increases. In most cases, inflationary rates are regulated through the variation of interest rates. In regard to investments, it can…...

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Works Cited

Gillespie, Andrew. Foundations of Economics. Oxford: Oxford University Press, 2007. Print.

Investopedia. "Inflation Tutorial." Options Outlet. 5th December 2006. Web. 31st November 2011.

Macdonald, Nadia, T. Macroeconomics and Business: An Interactive Approach. London: Cengage Learning EMEA, 1999. Print.

inflation rate? Is inflation a worry or are we in a period of stable prices?
What is the unemployment rate? Will the high unemployment rate cause deflation? What is the current structure of the labor market? How does the current structure affect the threat of cost push inflation or deflation?

What is the growth rate of GDP? Can you find predications on the future growth rate?

What is the income distribution? How has this changed over recent history?

Economic Questions

What is the inflation rate? Is inflation a worry or are we in a period of stable prices?

The inflation rate for May 2005 was 2.80%, this is down from 3.51% in April and 3.15% for March. The average inflation rate from May 2005 to January 2000 was 2.79% ("Inflation rate," 2005). Therefore, this current inflation rate was not wholly unexpected. With this fairly consistent rise, interest rates have been able to adjust in accordance…...

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References

% growth. (2005). Euromonitor International. Retrieved June 18, 2005, from Euromonitor database.

Inequality, poverty, and redistribution. (2002). Retrieved June 18, 2005, from  http://www.unf.edu/~traynham/ch18lecture.pdf#search= 'income%20distribution%20united%20states.

Inflation rate in percent for Jan 2000 -- present. (2005). Retrieved June 18, 2005, from  http://inflationdata.com/inflation/inflation_rate/CurrentInflation.asp .

Rank order -- GDP -- real growth rate. (2005). Retrieved June 18, 2005, from  http://www.cia.gov/cia/publications/factbook/rankorder/2003rank.html .

inflation is falling to levels not seen for years," Floyd Norris (2013) argues that there is a trend towards slow inflation growth in many Western countries. The author presents evidence in the form of inflation figures from the U.S., the UK, Japan, and the Eurozone. The author cites lower oil prices and slow growth in the price of durable goods as contributors to this phenomenon.
What needs to be separated here is the headline, which was not necessarily written by the author of the author (indeed, almost certainly not). Taking that away, the author is merely recounting some economic trends using publicly-available data. It is perhaps a little presumptuous of the headline writer to argue that inflation is falling around the world when the actual evidence presented is only from specific parts of the developed world. Nobody will dispute that there are the largest economies in the developed world, but…...

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References

Norris, F. (2013). Around the world, inflation is falling to levels not seen in years. New York Times. Retrieved December 5, 2013 from  http://www.nytimes.com/2013/11/16/business/economy/around-the-world-inflation-is-hitting-lows-not-seen-for-years.html?_r=1& ;

Investopedia. (2013). Definition of inflation. Investopedia. Retrieved December 6, 2013 from  http://www.investopedia.com/terms/i/inflation.asp

The effects of such a downturn is felt across an entire generation of people and it transforms the mindset of the people as well as the country's economy drastically. An example of such a downturn was the Great Depression of 1929 that saw extremely high levels of unemployment, underemployment and economic suffering.
Economic expansion is a favorable period in which the economic activity increases across all sectors and industries. During this period, there is an increase in GDP, credit is readily available and there is an overall air of prosperity. Economic contraction, on the other hand, is a period during which there is a decline in GDP, the economic growth slows down and unemployment increases. The expansion and contraction are part of a business cycle and they follow each other.

elationship between these terms

Each of the above-mentioned terms are intertwined with one another. They are an integral part of the business…...

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References

Krugman, Paul; Wells, Robin. (2009). Macroeconomics. New York:Macmillan.

3 million) of the decrease occurring in the last 5 months, across all major industry sectors." There is also a troubling pervasiveness to the extent of the downturn: "The number of long-term unemployed (those jobless for 27 weeks or more) rose to 3.2 million over the month and has increased by about 1.9 million since the start of the recession in December 2007." The rate of involuntary part-time workers also climbed by 423,000 to 9.0 million. This underemployment rate may reflect workplaces that cut worker hours rather than initially resort to worker layoffs to deal with a downturn in demand.
The high unemployment rate is one of the reasons for the existence of the economic stimulus package. The current administration is using macroeconomic policy to infuse money into the economy by hiring workers to work on a variety of projects and by providing aid to private sources to hire more workers.…...

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Works Cited

CPA FAQ. (2009). U.S. Bureau of Labor Relations website. Retrieved April 22, 2009 at  

Model Development

The purpose of this study is to determine the macroeconomic factors that contribute to changes in inflation such as economic fundamentals and policies. The second part of the research uses a Markov switching model with time-varying transition probabilities to capture the changes in inflation and their determining factors. This model was developed through the evolution of several previous studies and is considered to be relevant to the research at hand.

The Markov Switching model used is the result of similar studies by Bleaney (1997) and Blix (1999) that used a switching VAR model to obtain time-varying probabilities of inflation processes. A suitable model was examined in Dropsy and Grand (2000) that asked a similar question to the one being explored in this research using a similar data set. The Markov switching model used by them sufficiently describes the data set being used in this research model.

The data for this research…...

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Works Cited

Bleaney, M. 1997. The Dynamics of Money and Prices Under Alternative

Exchange Rate Regimes: An Empirical Investigation. IMF Working Paper

97/15. International Monetary Fund. Washington, D.C.

Bleaney, M. And Fielding, D. 2005. Exchange Rate Regimes, Inflation and Output

I do not agree with the statement that opposition to the Weimar government from 1924-1929 was harmless. There were several significant opposition groups during this period that posed threats to the stability and functioning of the government.

Firstly, right-wing extremist groups, such as the Nazi Party led by Adolf Hitler, emerged during this time and gained considerable support. These groups vigorously attacked the Weimar Republic, spreading their ideologies of racism, anti-Semitism, and authoritarianism. Their opposition was far from harmless, as they organized violent activities, attempted coups, and disrupted the political process. The Beer Hall Putsch in 1923, led by....

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1. The Impact of Inflation on the Economy

2. Causes and Consequences of Inflation

3. Controlling Inflation: Policy Options

4. Understanding the Relationship Between Inflation and Unemployment

5. Inflation and Its Effects on Different Socioeconomic Groups

6. The Role of Central Banks in Managing Inflation

7. Inflation and Interest Rates: A Complex Relationship

8. Inflation and the Purchasing Power of Currency

9. Globalization and Inflation: How are they Related?

10. Inflation in Developing Countries: Challenges and Solutions
11. Hyperinflation: When Prices Spiral Out of Control

12. Inflationary Expectations: How Public Perception Influences Economic Trends

13. The Psychology of Inflation: Why Do People React the Way They Do?

14. The Politics of Inflation: How....

The Economic Plague: Unraveling the Perils of Persistent Inflation

The Contagion of Inflation: Its Causes, Consequences, and Cures

Inflation: A Pandemic for the Economy, a Remedy for the Debtors

The Silent Thief: Inflation's Insidious Impact on Households and Societies

Unveiling the Enigma of Inflation: A Multifaceted Exploration of Causes and Effects

The Inflation Crisis: A Symptom of Deeper Economic Malaise

Hyperinflation: The Monetary Abyss, Historical Precedents, and Lessons Learned

Inflation: A Catalyst for Social Unrest, Political Instability, and Economic Collapse

Taming the Inflationary Beast: Central Banks, Monetary Policy, and the Fight Against Price Spirals

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