"Understanding inflation is crucial to investing because inflation can reduce the value of investment returns. Inflation affects all aspects of the economy, from consumer spending, business investment, and employment rates, to government programs, tax policies, and interest rates. This article explains the basics: What is Inflation? What Causes Inflation?...
"Congressman, I couldn't agree with you more that inflation is a tax, and that inflation is currently too high." Responding to Congressman Ron Paul's charge that he was "probably the biggest taxer in the country," Federal Reserve Chairman Ben Bernanke agreed that inflation, which by definition is the creation...
In 1997, the U.S. Treasury introduced Inflation Indexed or Protected Securities with substantial promotional fanfare. Yet, due in part to what some in the finance profession have described as a “tax disadvantage” placed upon TIPS, many are questioning whether they should appeal to a wide audience. Some, in fact,...
Mutual fund performance is commonly measured in gross (i.e. pre-tax and pre-inflation) returns. Unlike inflation, the impact of taxes on equity returns varies widely among investors. While some investors have a high marginal tax rate, others have a very low one. Inflation, on the other hand, is uniform in its...
Personal exemptions and standard deductions will rise, tax brackets will widen and income limits for individual retirement accounts will increase in 2007 based on inflation adjustments announced today by the Internal Revenue Service.
This article investigates the ability of a region participating in a currency union to affect its inflation differential with respect to the union through fiscal policy. It studies the interaction between regional fiscal policy and inflation differentials in a flexible price, two-region model with both traded and non-traded goods. For...
These paper reports on an exploratory application to Canadian data of an approach pioneered by Martin Feldstein (1997, 1999). Feldstein finds that even at low inflation rates there are costs arising from the distortions introduced by the interaction of inflation with the taxation of income from capital (capital gains, dividends,...
This paper studies the patterns of inflation skewness in 56 countries. Monthly data suggests that inflation is positively skewed. Paper investigate linkages between skewness and non-linearity, showing that concavity convexity will lead to negative positive skewness if the independent variable is symmetrically distributed. Paper construct a public finance model...
Macroeconomic theory postulates that fiscal deficits cause inflation. Yet empirical research has had limited success in uncovering this relationship. This paper reexamines the issue in light of broader data and a new modeling approach that incorporates two key features of the theory. Unlike previous studies, it models inflation as nonlinearly...
Inflation targeting a framework for monetary policy that commits the central bank to achieving low inflation has enjoyed considerable success among industrial countries in helping to maintain price stability. The article shows that Of course, the stock market and the economy are also benefiting from the recently enacted tax-cut package....
This paper re-examines the relationship between inflation, inflation volatility and growth using cross-country panel data for the past 30 years. To examine the role of inflation uncertainty on growth, intra-year inflation data to construct an annual measure of inflation volatility is used. Using this measure, it is found that inflation...
Discrepancies regarding the treatment of taxes exist among state, circuit, and federal courts in application; but some researchers argue that the treatment of taxes is sometimes deemed immaterial and should be ignored, although no formula is provided for that determination. This inconsistency might be interpreted as misunderstanding by court participants...
WASHINGTON -- The House stopped a potential tax nightmare for about 128,000 Utahns by passing a one-year patch to a complicated tax law Wednesday just before ending the first session of the 110th Congress. With a 352-64 vote, the House approved a temporary fix to the alternative minimum...
The article says that inflation is the general increase in prices on a nationwide scale -- and can only be caused by an agency that has the power to act on a national scale. That agency is the government. Inflation is the increase in prices caused by the government 'inflating'...
Your last experience with inflation might have been the undeserved B you got in Rocks and Smocks, that science course for art majors you took in college. But unlike grade inflation, monetary inflation is serious business indeed. You can construct an inflation-fighting portfolio of your own -- or the fund...
BENEATH the headlines of Wall Street's financial crisis lurks the economic killer for ordinary Americans -- inflation. It steals from the pocketbook of every American consumer, in an across-the-board regressive tax hitting especially hard those who spend most of their income on food and energy. It cuts...
The paper quantifies the gains associated with" reducing the distortion in favor of current consumption rather than future consumption and in" favor of the consumption of owner occupied housing. These tax effects are much larger than the" effect on the demand for money that is generally emphasized in studies of...
An inflation-linked bond is a bond that provides protection against inflation. Most inflation-linked bonds, the Canadian "Real Return Bond "RRB and the new U.S. Treasury inflation-protected security IPS are principal indexed. This means their principal is increased by the change in inflation over a period. In most countries, the Consumer...
Low inflation has been a fact of economic life in many countries now for at least a decade. If inflation persistence has declined, why has it occurred? This paper addresses this question by studying the univariate inflation process in a number of countries. It helps to identify if changes in...
To: POLITICAL EDITORSContact: Sheila Ballen of the Pennsylvania Department of Education, +1-717-783-9802 HARRISBURG, Pa., April 5 /PRNewswire-USNewswire/ -- The Pennsylvania Department of Education today announced that approximately 60 percent of the state's 501 school districts will keep any property tax increase for next year below the inflation index included in...
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