price stabilization


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Price Stabilization

The ultimate goal of the steps a central bank takes to reduce inflation. That is, when prices are rising rapidly, the central bank may reduce the amount of money in circulation and/or raise interest rates to bring down the rate at which prices are rising. Price stabilization does not bring prices down to their former levels, but it does reduce the rate at which they rise to a more sustainable level. While this is popular in theory, it is important to note that Federal Reserve chairman Paul Volcker caused a recession in the early 1980s when he raised interest rates to 18% to achieve price stabilization.

price stabilization

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References in periodicals archive ?
A comparison of future markets and price stabilization schemes as means of earnings stabilization is provided by Hallett and Ramanujam.
In 1988 Mexico began its economic restructuring by focusing simultaneously on four interrelated issues: price stabilization, privatization, domestic deregulation and trade liberalization.
Because of the American experience in World War I, when widespread profiteering spawned massive inflation and 22,000 new millionaires, Roosevelt was actively invetigating the merits of price stabilization by the timeof the Battle of Dunkirk in May 1940.
According to the Leopardo white paper, while fuel prices may eventually come back down, any signs of material price stabilization are in question for the foreseeable future because of the plummeting value of the U.
It is important to clarify that The negotiations carried out through these auctions have a compensation scheme at the price of the product, whose resources amount to $ 3,000 million, come from the Milk and Meat Price Stabilization Fund.
If NFA were to be restructured to focus exclusively on buffer stocking, some other agency will have to take on the price stabilization function until our rice farmers are ready for full rice trade liberalization.
That has led to the introduction in the Senate of the Business Risk Mitigation and Price Stabilization Act, which passed the House by a vote of 370-24.
As for the positive to support the markets, we might call oil price stabilization (the day before yesterday EU confirmed introduction of the oil embargo against Iran from July 1), Italy does not exclude buying bonds of NCB, there is a rumor on EU having prepared a project of partial transfer of the budget sovereignty by violators of fiscal discipline to European authority.
The Ministry of Strategy and Finance (MOSF) held a meeting on May 3 to discuss the government's price stabilization efforts.
He added that the outlets that have signed price stabilization agreements with the Ministry own around 70 per cent of the local retail market.
The Conference on Price Stabilization Policy, which advises the prime minister, met Tuesday and decided to set up a committee to estimate the impact of such a phenomenon on employment, economic growth and income distribution, they said.