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26 pages/≈7150 words
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MLA
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Mathematics & Economics
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Dissertation Review
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English (U.S.)
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Oil Shocks and other Determinants of Inflation in the US (Dissertation Review Sample)

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Type of service: Writing from scratch Work type: Dissertation Deadline: 30 Jan, 04:52 PM (-27d 7h) Academic level: Masters Subject or discipline: Economics Title: Oil shocks and other determinants of inflation in the US Number of sources: 25 Provide digital sources used: No Paper format: MLA # of pages: 26 Spacing: Double spaced # of words: 7150 # of slides: ppt icon 0 Paper details: 1.Abstract: Describe the way how to examines the determinants of inflation 2.Contents 3.Introduction: describe the history of inflation in the US 4.Literature review: at least 20 5.Inflation model for US: for example CPI is the function of changes in the 6.price of tradable and non tradable goods %CPI+a%pt+(1-a)%Pn 7.Econometric Methodology: quarterly time-series data in the period at least 20 years, with Using Dickey-Fuller test, Cointegration test, VEC and VAR approaches to find the evidences of those variables that are mentioned by the literature review are significantly related to the US inflation 8.Interpreting result 9.Conclusion 10.References 11. Appendix

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Oil Shocks and other Determinants of Inflation in the US
Abstract
This paper provides an econometric analysis of inflation in the United States. It focuses on oil price shocks and other determinants of inflation. The researcher also explores the role of resource utilization, inflation expectations, and persistence, the roles of imports, financial markets, and unemployment among others. The paper will also include a cross-sectional analysis of inflation dynamics over episodes of persistent of large slack and slow inflation. The paper will focus on the period when the U.S experienced several periods of high inflation that have been partially attributed to positive oil price shocks, as well as, the responsiveness of the U.S inflation on oil price shock. Currently, economic theory that is supported by empirical data demonstrate that oil price shock can contribute to short run changes in inflation since inflation is seen as the average price of final goods produced in a given economy and the implications derived from an input price can differ from the Consumer Price Index (CPI) that is used to determine the average price of consumption. The findings of the study will reveal that, as oil price increases, the nominal value added falls whereas the domestic real value added remains at a constant rate; hence resulting to a short run deflation in value added measures, such as, the CPI. This means that CPI will experience rising inflation due to an increase in oil price. The paper’s findings will include periods of financial crises, stability of inflation expectations, and maintenance of real inflation.
Table of Contents
Abstract…………………………………………………………………………………….1 Introduction………………………………………………………………………………..3 Literature review…………………………………………………………………………...7 Inflation model for US……….…………………………………………………………….9
Econometric Methodology………………………………………………………………..19
Discussion……….…………………………………………………………………………21 Conclusion…………………………………………………………………………………26 References…………………………………………………………………………………28 Appendix………………………………………………………………………………….32
1.0 Introduction
Inflation in any economic environment depicts the constant rise in the overall price level of commodities and services for a specific period. Since a certain amount of currency purchases particular amount or quality of a good or service, inflation shows the decrease in the buying power per unit of the dollar. This generally accounts for value loss in exchange rates and economical records (Abel and Bernanke 2005).
1.1 The history of inflation in the U.S
The Great Inflation of the U.S was caused by an error in monetary policy and the Inflation Stabilization as a result of a restoration of a more effective monetary policy. Monetary policy was considered to be too accommodative during the period of the Great Inflation; hence, sizable inflations are considered not to have the capacity to endure such accommodations. However, earlier researchers do not attribute the Great Inflation to oil or commodity shocks or to other cost-push events per se (Sill, 2007). This was basically attributed to policy ignorance, and the historical accounts of the Great Inflation had various variants. The first variant is that policy makers, in the latter 1960’s, made attempts to exploit a pre-accelerationist Phillips curve only to observe that over time, the short term relationship between inflation and unemployment was unstable, whereas the long-term Phillips curve was vertical. Therefore, the shift to a less accommodative Federal government policy reflected in an appositive real interest rate response that resulted into inflation news.
On the other hand, there were some arguments that suggested that policy makers projected a rise in inflation, in order to, exploit a short-term Phillips curve in contrast with observed negative response of a short-term real interest rate to the inflation that was broadcasted prior to 1979. In addition, there was also a learning model that suggested that the U.S policy makers should have understood that by early 1970’s. Therefore, the long-run Phillip curve was vertical. Inflation generally drifted higher during the time and exceeded the figures that were predicted, having allowed inflation to increase in the 1960’s. This was aimed at improving economic growth because the U.S policy makers limited monetary tightening in the 1970’s because it was believed that real economic activity and growth would slacken inflation. In 1980's, policy makers in the U.S, returned to an assessment that once prevailed in the 1950’s based on an economic capacity to push the economy beyond a level that would quicken inflation and result to substantial and rapid costs.
Fig 1: History of inflation in the U.S
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The quantity of the dollar supply in the United States showed changes from time to time. In the global historical period where gold was the major form of currency, the rate at which the gold coins are processed determined the sup...
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