There is also a
demand shock component in the meltdown in
The restrictions applied are as general as possible--that prices and quantities move in the same direction following a
demand shock and inversely following a supply shock.
A rise in the policy interest rate, for example, will be interpreted partially as a central bank attempt to offset a projected positive
demand shock and partially as an attempt to contract real output to offset a positive cost shock.
One does not have to be a hardcore Keynesian to wonder what the effect would be of such a
demand shock on the U.
Over a fifth of GCC exports are to China, the EU and the US, so a simultaneous
demand shock in these countries could have a significant impact on demand for GCC exports.
We follow this approach in our study by identifying a money-multiplier shock that captures unexpected changes to demand for currency and the demand for reserves, a real money
demand shock, and a monetary policy-induced shock to the monetary base.
Hit by a monstrous external
demand shock that sent world trade tumbling by a record 10.
And even if Greece was able to pare down the debt without killing its economy through an acute aggregate
demand shock, the country anyway has a huge competitiveness problem.
They will seek to establish whether the banks can weather a series of adverse scenarios over the next two years, including a worsening of the eurozone sovereign debt crisis, a global negative
demand shock in the United States, sliding property markets, and major depreciation in the dollar.
Specifically, it points to the intertemporal optimising models and the New Keynesians models in which aggregate supply may respond positively to a positive aggregate
demand shock.
It is composed of three elements: a set of EU shocks -- mostly tied to the persistence of the ongoing sovereign debt crisis, a global negative
demand shock originating in the U.
In the following, we perform a simple stress test exercise to show how high inflation could go in 2011 if we assume a severe
demand shock to energy and food prices relative to our working assumptions.
