Book Description

Book Description

Rampant inflation is a major economic problem in many of the less developed countries; two out of three attempts to stabilize these economies fail. Inflation Stabilization provides a valuable description and a critical analysis of the disinflation programs introduced in Argentina, Bolivia, Brazil, and Israel in 1985-86, and discusses the possibility of such a program in Mexico. It documents the initial steps in stabilization as well as the reasons for failure.

As architects of the programs, several of the authors are in key positions to assess which aspects were critical in getting the programs accepted and where to look for difficulties and failures.

In Israel, inflation was halted without recession. The challenge to policy makers today is in shifting from stabilization to the revival of sustained growth. This experience is described fully by Michael Bruno and Sylvia Piterman, who examine the critical issue of exchange rates, and by Alex Cukierman, who uses modeling to analyze the interaction of money, wages, prices, and activity under rational expectations that take the government's policy objectives into account.

Endemic inflation and a sudden increase in external debt burden Argentina's economy, raising the wider issues of high inflation economies and stabilization that are discussed in the chapter by Jos Luis Machinea and that by Guido Di Tella and Alfredo Canavese.

Eduardo Modiano and Mario Simonsen take up issues of wages in Brazil, particularly the problem of finding an equitable way to deal with a wage freeze; Simonsen develops an ambitious game theoretic rationalization of incomes policy as a coordinating device for imperfectly competitive economies.

Bolivia did reach hyperinflation (price increases of more than 50 percent each month) before stabilizing. Juan Antonio Morales shows how stabilizing the exchange rate, in an economy where all pricing was already geared to the dollar, achieved stabilization without a wage or price freeze. And Francisco Gil Diaz asks whether an incomes-policy based program could work to control ever increasing inflation in Mexico.

Michael Bruno is Governor of the Bank of Israel; Guido Di Tella is a Fellow of St. Anthony's College, a Professor at the Di Tella Institute in Buenos Aires, and a Member of Parliament in Argentina; Stanley Fischer is Vice President of Development Economics and Chief Economist at the World Bank. Rudiger Dornbusch is Ford International Professor of Economics at MIT. ... Read more

Book Description

How should governments and central banks use monetary policy to create a healthy economy? Traditionally, policymakers have used such strategies as controlling the growth of the money supply or pegging the exchange rate to a stable currency. In recent years a promising new approach has emerged: publicly announcing and pursuing specific targets for the rate of inflation. This book is the first in-depth study of inflation targeting. Combining penetrating theoretical analysis with detailed empirical studies of countries where inflation targeting has been adopted, the authors show that the strategy has clear advantages over traditional policies. They argue that the U.S. Federal Reserve and the European Central Bank should adopt this strategy, and they make specific proposals for doing so.

The book begins by explaining the unique features and advantages of inflation targeting. The authors argue that the simplicity and openness of inflation targeting make it far easier for the public to understand the intent and effects of monetary policy. This strategy also increases policymakers' accountability for inflation performance and can accommodate flexible, even "discretionary," monetary policy actions without sacrificing central banks' credibility. The authors examine how well variants of this approach have worked in nine countries: Germany and Switzerland (which employ a money-focused form of inflation targeting), New Zealand, Canada, the United Kingdom, Sweden, Israel, Spain, and Australia. They show that these countries have typically seen lower inflation, lower inflation expectations, and lower nominal interest rates, and have found that one-time shocks to the price level have less of a "pass-through" effect on inflation. These effects, in turn, are improving the climate for economic growth. The authors warn, however, that the success of inflation targeting depends on operational details, such as how the targets are defined and when they are announced. They also show that inflation targeting is not a panacea that can make inflation perfectly predictable or reduce it without economic costs.

Clear, balanced, and authoritative, Inflation Targeting is a groundbreaking study that will have a major impact on the debate over the right monetary strategy for the coming decades. As a unique comparative study of what central banks actually do in different countries around the world, this book will also be invaluable to anyone interested in how economic policy is made. ... Read more

Reviews (2)

Yawn
I have never been a fan of condensed books for the obvious reason that they leave out content and motivation. This book, however, could be shrunk by 3/4 without any real loss. Yes, there is much in-depth case study information here, but the paper could have been much better used by substituting much of it for some harder, theoretical motivation and analytical discussions. The authors are capable of this. Also, despite the painstaking redundent detail and a few regressions, for me the authors fail to place inflation targeting and inflation targeting countries into the greater context of inflationary policies and countries facing inflation. It surprises me that there is no mention of some of the, especially developing countries, where inflation has been a serious problem and where most battles of the future are likely to be fought.

Heavy on the case studies and mildly repetitive.
An easy to read book for people of all levels. It takes the reader through case studies on the various countries which have introduced inflation targeting. This is interesting from a historical perspective, but since inflation targeting really is a very simple concept (announce an inflation target, describe why you aim to hit this target, make it clear how you shall go about achieving this target and at all times be transparent in your pursuit of that target) the book tends to be repetitive. This book simply goes over too many similar regimes and thus cannot help but cover the same points over again. The last chapter is a study of the U.S. (a rare example of a country with very steady inflation which has not introduced an explicit inflation target) with some recommendations on how (and why) it should implement an inflation target. This book is recommended if you want very indepth case studies on the introduction of inflation targeting in countries as different as Sweden, New Zealand, The U.K. and Australia, but if you only need a quick overview of what inflation targeting is then buy a good general Economics textbook and read the section on it. ... Read more

Book Description

This history and analysis examines fifteen great inflations--from Ancient Rome to the French Revolution to post-World War I Germany to modern-day Brazil--to provide an understanding of the causes of inflation. A unique feature of the book is the evidence presented that a moderate degree of inflation is usually accompanied by increased economic activity. Contrary to the views of many, moderate inflation appears to be welcomed by most people and assists in returning incumbent political leaders to power. In addition, the money illusion, the belief that money has constant value over time, is shown by the author to be grievously in error. ... Read more

Reviews (1)

I have read this book again and again for ten years.
Allow me to pay respect and compliment to Mr. Don Paarlberg here. Mr. Don Paarlberg has an insightful understanding of human nature and their behavior that his examination and explanations of inflation history grab my intention very time I read this book. They make a lot of senses and transform my knowledge of economics into a penetrating understanding of human behavior and reactions to certain events. Mr. Don Paarlberg elevates my perspective toward macro-economics to a higher level, that of a human behavioral one, and certainly broadens my eyesight with regard to how human nature and human behavior did not change over the past two thousand years or so in terms of what people would do in reaction to price drivers. Lastly, I appreciate Mr. Don Paarlberg's exquisite, precise, and concise way of writing, something much less seen nowadays. Thank you, Mr. Don Paarlberg. ... Read more

Book Description

A survey of the new theories of inflation that have developed over the past two decades in response to the inflationary pressures experienced by Western countries examines the shifting debate from explaining inflation as a "causal" process to explaining its increase as a result of constantly changing expectations. ... Read more

Book Description

Handbook of Inflation Indexed Bonds provides complete coverage of inflation protection bonds beginning with their first U.S. issuance in 1997. Five, in-depth sections detail: strategic asset allocation; mechanics, valuation, and risk monitoring; global environment; issuers; and investors. ... Read more

Reviews (1)

Crucial guide
There's no better source for insight on the new-since-1997 Treasury Inflation Protection Securities [TIPS]. Brynjolfson runs one of the largest TIPS funds. Fabozzi is a well-known commentator on investments and fixed income specifically. Want details of CPI seasonality, integrating TIPS in mean-variance optimization, etc.? It's here. Also includes coverage of international TIPS-equivalents. ... Read more

Book Description

In 1790 the French people, by general acquiescence, embarked upon what they believed to be a harmless experiment in currency inflation.The results of this action are vividly described in Dr. Andrew D. White’s book entitled Fiat Money Inflation in France - How It Came, What It Brought and How It Ended.

The story of "Fiat Money Inflation in France" is one of great interest to legislators, to economic students, and to all business and thinking men.It records the most gigantic attempt ever made in the history of the world by a government to create an inconvertible paper currency, and to maintain its circulation at various levels of value.It also records what is perhaps the greatest of all governmental efforts - with the possible exception of Diocletian’s - to enact and enforce a legal limit of commodity prices.Every fetter that could hinder the will or thwart the wisdom of democracy had been shattered, and in consequence every device and expedient that untrammelled power and unrepressed optimism could conceive were brought to bear.But the attempts failed.They left behind them a legacy of moral and material desolation and woe, from which one of the most intellectual and spirited races of Europe has suffered for a century and a quarter, and will continue to suffer until the end of time.There are limitations to the powers of governments and of peoples that inhere in the constitution of things, and that neither despotisms nor democracies can overcome.

Legislatures are as powerless to abrogate moral and economic laws as they are to abrogate physical laws.They cannot convert wrong into right nor divorce effect from cause, either by parliamentary majorities, or by unity of supporting public opinion.The penalties of such legislative folly will always be exacted by inexorable time.While these propositions may be regarded as mere commonplaces, and while they are acknowledged in a general way, they are in effect denied by many of the legislative experiments and the tendencies of public opinion of the present day.The story, therefore, of the colossal folly of France in the closing part of the eighteenth century and its terrible fruits, is full of instruction for all men who think upon the problems of our own time. ... Read more

Book Description

This book analyzes why local officials in China comply with investment-reduction and inflation-control policies of the central government against their own economic interests. The book shows the importance of political institutions, and provides a political story as to why China has been able to control inflation and to deepen reforms, in contrast to the former Soviet Union. While most other studies focus on the economic or political aspects, Inflation and Investment Controls in China integrates political and economic analysis. ... Read more

Reviews (1)

Breaking new ground
China specialists, and political scientists of any stripe studying "state capacity" would do well to check this book out.

Businesspeople or others negotiating with local governments may also want to have a look at the chapters describing the ways that the central government can curtail local autonomy.

Many observers of China have interpreted the decentralization of economic authority to local governments as representing a loss of power for the central government. In this book, Huang carefully lays out the objectives of politicians at the central and provincial levels, and the control systems available to the center. He then uses economic data on inflation and investment to demonstrate that, at least for this one aspect, the central government has in fact been able to use its political tools to rein in provincial leaders when necessary.

This book is exemplary for its careful generation of hypotheses, and testing of these using publicly available, reasonably objective data. ... Read more

Book Description

Over 4 million people are logging onto the Internet to research stocks, check quotes, and make investments, and the number is growing daily. It's hard to believe that only three years ago the average person hadn't even heard about online investing. And a little over a year ago people in the bricks-and-mortar financial industry didn't believe that online brokerages could compete. Now the likes of Merrill Lynch, Prudential Securities, and Morgan Stanley are rushing to create their own online brokerage sites.

In The Unofficial Guide to Online Investing, new and experienced investors learn to:

• Choose which computer, Internet Service Provider, and investment software is best for online investing
• Find the web sites every online investor must know
• Pick an online broker and set up an account
• Monitor investments on- and off-site
• Evaluate online investment clubs, bulletin boards, discussion forums and news groups, mailing lists, and magazines
• Avoid the scams and pitfalls of online investing -- what happens if the online brokers site crashes?

Reviews (3)

An Exceptional Guide to Investment and Money Management
The Unofficial Guide to Online Investing by Henry Robb is an excellent guide for the individual investor. If you're looking for an extremely thorough, reader-friendly, comprehensive reference tool for not only online investing but a myriad of other vital financial concerns, look no further. It's obvious that the author took great pains in putting this book together. It's wonderfully written in an interesting, easy-to-understand style that doesn't intimidate or confuse the reader. On the contrary, you get the feeling that Mr. Robb has been an investment veteran for a number of years and through his day-to-day experience in dealing with the various financial markets, he has gained a great deal of wisdom on the subject.

The information, which is meticulously organized, is highly objective in nature. The author paints a very honest, if sobering view, of the overall financial picture, and he gives the reader an opportunity to find out about him- or herself with the inclusion of various personality assessment exercises. They were very helpful in gauging where I stand regarding investing, and they'll provide a basic framework or starting point, if you will, for my future investment decisions.

Lastly, I would like to reiterate that this book discusses a wide variety of financial issues within the context of personal investment. That is a key reason why I believe this book is so useful. Its scope as well as its careful attention to detail makes The Unofficial Guide to Online Investing a truly wonderful source of information, as it addresses just about every kind of question relating to individual money management.

Should be titled "The Unofficial Guide to Personal Finance"
This book should have been titled "The Unofficial Guide to Personal Finance". Only Part IV, chapters 10 through 13, about 160 pages are devoted to online investing, and it's at a very elementary level. The rest of the book deals with bank accounts, credit cards, debt reduction, insurance, taxes, and other personal finance issues. If you want to learn about Online Investing, leave this book on the shelf and look for another book which has doesn't have all this non-Online Investing stuff. Leave this POS on the shelf.

An Outstanding Reference
I just finished reading "the Unofficial Guide to Online Investing". This is a great book for the beginner through experienced individual investor. Robb covers all the critical topics in stages, increasing detail with each stage. What results is an excellent tutorial/reference (not to mention an easy read) concerning all aspects of investing. Starting with setting your house in order to planning and executing an investment plan. Well Done! ... Read more

Book Description

This volume contains articles on the subject of inflation, most of which originally appeared in the Federal Reserve Bank of Richmond's Economic Review.Collectively the articles summarize the major issues current in contemporary discussions of the inflation problem. Topics covered include theories of inflation, reasons for its persistence, models of the inflationary transmission mechanism, the relationship between inflation and unemployment, the formulation of inflationary expectations, inflation and the demand for money, interest rates and inflation, international aspects of inflation under fixed and floating exchange rates, and the feasibility of alternative anti-inflationary policies.These topics are examined from the perspective of the history of economic doctrines as well as from that of modern economic analysis.The purpose is to indicate the basic similarities in classical and current analyses of inflation and to demonstrate that virtually all of the ideas, arguments, and policy views underlying modern inflation debates have their roots in earlier policy controversies.In this connection, the collection incorporates additional essays dealing with the monetarist-nonmonetarist debate, the exchange rate doctrines of early monetary theorists, the historical evolution of the money demand concept, and the policy lessons of the German hyperinflation.Finally, because inflation is primarily a monetary phenomenon in the sense that it cannot long continue without the monetary growth necessary to sustain it, this volume emphasizes inflation theories that highlight the relationship between money and prices and that strongly support a policy of strong, noninflationary growth.

Additional essays deal with Keynes' views on inflation, with Adam Smith's theory of the international adjustment mechanism, with a terms-of-trade-augmented model of the monetary approach to exchange rates, with David Hume's and Henry Thornton's reconciliation of the quantity theory of money with the notion of a stable long-run trade-off between unemployment and inflation, with the early history of the Fisherian distinction between real and nominal interest rates, with the classical conception of the duties of the lender of last resort, and with the anti-growth views prevalent in the early 1970s.These topics are also examined from a monetarist doctrinal/historical position.

There are articles on the Phillips curve, the MV = PQ equation of exchange, and the notion of the short-run nonneutrality of money.The text shows how these tools have been employed in inflation analysis, past and present. ... Read more

Book Description

Alex Cukierman is well known for his work on central bank behavior. This book brings together a large body of Cukierman's research and integrates it with recent developments in the political economy of monetary policy. Filled with applications and carefully worked out technical detail, it provides a valuable comprehensive analysis of central bank decisions, of the various effects of policy on inflation, and of the feedback from inflationary expectations to policy choices.

Cukierman uncovers and analyzes the reasons for positive inflation and rates of monetary expansion. He shows that the money supply, and therefore inflation, are not exogenous. They are influenced by interactions involving distributional considerations, private information, personal motives, and the political environment. This point of view makes it possible to identify the institutional, political, and other features of a country that may be conducive to inflationary environments.

Cukierman presents new multidimensional evidence on both legal and actual central bank independence for a sample of up to 70 countries and uses it to investigate the interconnections between the distributions of inflation and of central bank independence. He takes up such issues as why some countries have more independent central banks than others and identifies reasons for the substantial cross country variation in seigniorage. He provides positive explanations for the tendency of central banks, like the US Federal Reserve, to smooth interest rates and to be secretive. Observing that it is likely that the European Economic Community will have a monetary union before the turn of the century, Cukierman applies the techniques of modern political economy to discuss the effect of this change on the commitment to price stability.

The book includes simple and advanced materials as well as informal summaries of the major technical results. The introduction contains a modular guide for reading and teaching the material. ... Read more

Book Description

This acclaimed work presents a comprehensive study of the most famous and spectacular instance of inflation in modern industrial society--that in Germany during and following World War I. Feldman sets the German inflation in the context of broader issues of maintaining economic stability, social peace, and democracy and thus contributes to the general history of the twentieth century. ... Read more

Reviews (1)

A great book to lose yourself in
This is great, hard-core history.

While this book probably won't appeal to the average run-of-the-mill history buff, it will attract anyone who wants to lose himself in a vary narrow, hyper-specialized area of history.

In many ways the economic disaster of Germany between 1914-1924 reworked the foundation of modern finance. For the first time in western history a political system was literally straightjacketed into salvaging an impossible economic situation. This book goes into exhaustive detail contrasting the unenlightened economic policies of the Allies to the increasingly discouraged Germans who desperately wanted to bring order to their lives.

Feldman does a great job helping the reader tune into the magnitude of the hopelessness that the German people felt regarding the impossibility of satisfying unpayable reparations. This is a crisp retelling of a people who did not have, and indeed were prevented from having the economic infrastructure to participate in a functional modern economy.

By the time Feldman is done telling you the story of Germany's incomprehensible inflation, you'll feel an intimacy with this subject. This book is indispensable for understanding the origins of the seething anger, frustration and hostility that the Nazi's were able to so successfully tap into and manipulate.

Finally, I should note that this book is itself something of an ordeal to read; it took me well over two years to read this 4 pound monster. But I have to say I enjoyed every hour I spent with it... ... Read more

Book Description

Book Description

Program-related investments (PRIs) are hybrid grants/loans made by foundations to charities. They allow foundations to stretch their limited funds further. This book provides foundations with guidelines for evaluating PRIs, monitoring grant recipients, and tracking returned funds. ... Read more

Reviews (1)

A good resource for foundations
This book is a wonderful primer for any foundation considering making program-related investments. ... Read more

Book Description

Inflation flows through every modern technological economy.Most accept it complacently; enjoying the increase in personal income, ease of Debt repayment, and the aggregation of Wealth through Property appreciation.None realize Inflation is nothing more than the monetary reflection of economic misallocation.This misallocation, left to itself, always brings Recession when the imbalance reaches the sufficient magnitude.Proper Reallocation comes with layoffs and loss of Personal Income.Correct Economic policy could forestall resource misuse, and eliminate Recessions. ... Read more

Book Description

Although all eyes have been on Southeast Asia since October, it's not the only gamearound. A broader look shows that the financial crisis in that part of the world is to global deflation what the 1973 oil embargo was to inflation: it focuses and augments the many forces already at work.For the last two decades, governments, corporations, and new technologies have promoted actions that, given certain triggers, will push prices down.

In his comprehensive new book, Deflation, A. Gary Shilling points out thedeflationary forces at work in the world, analyzes the impact of the Asian financial crisis, and predicts the kind of deflation that will likely result.

Governments, for example,have done their part by reducing spending and shrinking deficits.With the Cold War over, US defense spending keeps falling dropping from 7.4% of GDP in the third quarter of 1986 to 4%in the first quarter of 1998. Continental governments endure double- digit unemployment rates to move toward the Maastricht target, deficits no more than 3% of GDP. Deregulation among utilities and services is also lowering prices. In the US, Citizens for a Sound Economy, a Republican think-tank, predicts that deregulation of the electricity market would lead to a drop of "at least 43%" in consumers' electricity bills.

Meanwhile, central banks are still fighting the last war, inflation, with higher interest rates. Corporations are adding to deflation momentum with the restructuring that started in the US and UK in the 1980s and has spread to other English-speaking lands. Global outsourcing now provides not only less expensive goods but also cheaper services, including credit card processing and computer programming. Computer and information technology has deflation written all over it. Hardware and software are notoriously prone to price cuts, and users buy the stuff to reduce their own costs.

Outside the US, newly industrialized countries as well as countries recently freed from Communism are becoming major players in the export market.The result is a global glut of products and no one to buy them. With Southeast Asia's financial woes, its consumers are not much of a market, and the US the world's happy dumping ground can only buy so much. Faced with increasing global glut, countries wanting to use exports to improve their economies are more likely than ever to devalue their currencies. No doubt a strengthening dollar is deflationary to the US, and no doubt it is currently welcomed by Washington. But what happens as global glut and weak US exports meet rising labor costs, spurred by the drum-tight US labor market, head on? What happens if a profit squeeze kills overpriced US stocks, and individual investors who rely on their equity portfolios as their savings accounts suffer big losses?

Consumers retrench.Then they watch prices fall, and in a classic move that makes deflation a self-feeding phenomenon, they wait for prices to go even lower before spending a dime.

If, by some slim chance, the Asian crisis proves to be a nonevent for the US, the Federal Reserve will no doubt tighten credit and probably precipitate a recession, preceded, as usual, by a bear market in US stocks. The net effect on consumer behavior would be the same, and as with the case of an Asian-initiated bear market, the end result would be deflation.

When we in the US think of deflation, we think of the 1930s.Its images of soup lines and shanty towns are so vivid that any other idea of deflation pales by comparison. But there was deflation after the Civil War without the financial collapse of the '30s. The deflation Dr. Shilling forecasts coming soon is more likely to be characterized by the oversupply of the late 19th century than the unemployment of the Depression.

The final chapters of Deflation explain how deflation will affect you. Should you keep your stock investments or switch to bonds? Will your company need to be restructured again? What should you do about inventories? Have you personally been saving enough? Dr. Shilling gives you 13 investment strategies, 18 business strategies, and five personal strategies that will work in the deflationary years ahead.

Be prepared. In future years we may conclude that in the summer of 1997, Asia was the trigger for global deflation. ... Read more

Reviews (10)

Excellent book, easy to read, in depth analysis
I found this easy-to-read book very profound in its analysis of the inflation-disinflation-deflation pattern that we are witnessing today.

The book is filled with charts that highlight the author's message. The last several chapters on investment, business, and personal strategies are priceless.

No weasel words in this book. Lots of forecasts.

John D.

Shilling's use of Kondratieff theory
A careful look at the book shows that Shilling's THEORY for deflation is based on the longwaves of Kondratieff. Unfortunately, Shilling uses a real rather than monetary interpretation of longwaves which results in his use of 1974 rather than 1980 as the beginning of the current wave down.

Informed & rational summary of a plausible scenario.
Shilling predicts good - rather than bad deflation (at least for the USA): i.e. surging demand absorbing excess supply because of price falls. It is a US-centric view - weaker on the international side. Deflation addresses an important & neglected subject. The slow start is tolerable because of good, up-to-date graphs and data generally. Happily he is consultant-clear rather than economist-arcane. His analysis of the US economy is compelling & useful for foreign readers. Nonetheless, there are questions: will policymakers (including central bankers) not adjust; e.g. I understand that defense spending has started rising again. Shilling's review of factors such as the internet is useful. The foreign material is poorer - though his Asian chapters are good. Bizarrely for such a serious & scholarly work, there is no index.

Shilling is worth reading - he thinks the west will experience 'good' rather than 'bad' deflation - but how deep will the Deflation be and how long will it last? He could have usefully studied natural resources in more depth; after all, this is where deflation hit hardest and earliest. I will read him again.

This book is a MUST read for investors!
This book will help you make sense out of the headlines you have been seeing everyday in the business section of your paper. It will help you "connect the dots" about megatrends you maybe were aware of, but not taking into account with your investment decisions. I read this back in August 1998, and it is amazing how current events seem to be playing out almost exactly as forecasted in the book. You should not miss the chance to read this.

Compelling arguments; 'must read' for investors.
Quick, compelling arguments to change the way you think about the economy and the future. Well written and easy to understand, and fairly light reading for economics. "Must read" for investors, those approaching retirement, etc. Especially important for those with a lot of debt, or thinking about doing a lot of borrowing. Not a 'doomsday' piece, but very thought-provoking as to understanding new ways to win in investing. ... Read more

Book Description

Inflation-protection bonds are specifically designed to hold their value in today’s uncertain economy. If you are unfamiliar with their specific attributes and uses, you may be missing out on one of the most powerful and versatile fixed income products in the marketplace today! In this detailed book, institutional investment officers John Brynolfsson and Anthony Faillace give you the most up-to-date research findings and information available on these uniquely conservative new instruments. This essential guide provides complete details on: How and why IPBs were created, with background information vital for you to ensure the value of your IPB investment; Strategies that you can easily use to profit from IPBs; and the role of IPBs in a global investment strategy. Inflation-Protection Bonds is the first book to explain both the benefits and the risks of one of today’s most intriguing and potentially productive investments. Its specific steps and recommendations will help assure that IPBs become a valuable addition to your investment portfolio. ... Read more