Structural Inflation

Structural Inflation

Inflation that occurs because a government pursues an excessively loose monetary policy. That is, if a central bank prints too much money or keeps interest rates too low for too long, the value of each unit of currency drops more than it would simply from increased demand.
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The New Zealand Structural Inflation Model, NZSIM, is the latest iteration in the Reserve Bank's structural macroeconomic modelling.
The current low inflation environment could be sustained over the medium term as underlying structural inflation dynamics are favorable with the improved ability of the domestic economy to accommodate supply shocks, the BSP added in a statement last week.
The lower growth environment is partly behind the rise in structural inflation, due to the lack of infrastructure development.
In fact, even in good times market participants factor in the risk of higher import costs, leading to structural inflation.
Furthermore, structural inflation will not disappear owing to cyclical developments or short-term stabilization policy measures.
India has a large current account as well as large fiscal deficit and the room for flexibility is curtailed by their high structural inflation.
Structural inflation problems continue to worsen and will threaten growth in the medium-term.
Almunia also notes that member states are being affected by the shocks that have hit the eurozone in diverse ways, which calls for the "broadening of macroeconomic surveillance and coordination" in order that appropriate measures may be taken in terms of "competitiveness, external imbalances, structural inflation and labour costs".
Theories of structural inflation, like their cousins in the employment department, once confined to the developing countries, especially Latin America, are now applied to industrialised economies.
A structural inflation model similar to one employed by the Federal Reserve Bank of San Francisco (described in Throop, 1988) was utilized to derive relatively sophisticated forecasts of inflation.
The 1994 inflation is a precise example of structural inflation during economic transition as discussed in Chang (1994, 1995).
For both regression and structural inflation forecasts in this section, as well as for the macroeconomic simulation model later in the article, a more conservative projection of utilization is made: growth in utilization of health care services will be 1 percent for the next 10 years, 0.
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