Book contents
- Macroeconomics for Professionals
- Macroeconomics for Professionals
- Copyright page
- Dedication
- Contents
- Acknowledgments
- Glossary of symbols and acronyms
- Preface
- Chapter 1 Introduction, Motivation, and Overview
- Chapter 2 Real Economic Activity
- Chapter 3 Inflation, Relative Prices, and Expectations
- Chapter 4 Monetary Policy and Accounts
- Chapter 5 The Fiscal System
- Chapter 6 Financial Stability
- Chapter 7 The External Accounts
- Index
Chapter 3 - Inflation, Relative Prices, and Expectations
Published online by Cambridge University Press: 09 January 2019
- Macroeconomics for Professionals
- Macroeconomics for Professionals
- Copyright page
- Dedication
- Contents
- Acknowledgments
- Glossary of symbols and acronyms
- Preface
- Chapter 1 Introduction, Motivation, and Overview
- Chapter 2 Real Economic Activity
- Chapter 3 Inflation, Relative Prices, and Expectations
- Chapter 4 Monetary Policy and Accounts
- Chapter 5 The Fiscal System
- Chapter 6 Financial Stability
- Chapter 7 The External Accounts
- Index
Summary
Chapter 2 focused on output, income, and expenditure in real terms, that is, in the prices and costs of a particular base year. But nominal values (i.e., current money values), which reflect both aggregate inflation and changes in relative prices, are equally important.1 Price and cost changes add several additional dimensions to macroeconomic analysis. Not only can we account for output, income, and expenditure in easy-to-measure nominal terms, but we also get the tools to assess inflationary or deflationary conditions and the influences of relative prices on the allocation of resources, the international competitiveness of a country, and the distribution of income.
- Type
- Chapter
- Information
- Macroeconomics for ProfessionalsA Guide for Analysts and Those Who Need to Understand Them, pp. 53 - 94Publisher: Cambridge University PressPrint publication year: 2019