Purchasing power

About: Purchasing power is a research topic. Over the lifetime, 2714 publications have been published within this topic receiving 36866 citations. The topic is also known as: adjusted for inflation.

A CPI-Futures Market

Abstract: If governments cannot control inflation, consumers must learn to live with it, however difficult that may be.' But the task of adapting to the uncertainties of inflation could be eased by the development of appropriate forward markets. Commodity futures provide a hedge against fluctuations in the price of a limited menu of commodities ranging from plywood to frozen orange juice and pork bellies. And in the foreign exchange market, it is possible to hedge against future changes in the value of the dollar vis-a-vis other currencies. Why not extend the concept of a futures market to provide a means of hedging against fluctuations in the general price level, as measured by the market basket with which the Bureau of Labor Statistics constructs the consumer price index. A CPI-Future is a promise to pay a sum of money sufficient to buy, at a specified maturity date, a BLS market basket of goods which would have cost $1.00 if it had been purchased in the 1967 base year. Anyone who buys a CPI-Future through his broker will receive at maturity a sum of money equal to whatever the CPI turns out to be at that date; and at maturity the buyer will pay at the price determined in today's market for CPI-Futures. Conversely, the seller of a CPI-Future promises to deliver a specific amount of purchasing power, however many dollars that may turn out to be, in return for the number of dollars specified when the CPI-Future was sold. For example, if the equilibrium price of CPIFutures maturing 1 year hence is 130 when the CPI stands at 125, it means that next year's dollars are depreciated in the market place by 4 percent vis-h-vis the present. It also means that the buyer of a CPIFuture is guaranteed however many dollars are required to buy as much as $1.00 would have purchased in 1967; he has bought certainty.2

A Keynesian Theory of Banking: A Comment on Dymski

Abstract: In a recent paper, Dymski argues that Post Keynesians have not given sufficient consideration to an analysis of the "microlevel bank behavior" (1988). Post Keynesians have not pursued Keynes's suggestion that banking is "a 'dual' activity, involving credit creation and liquidity provision" (1988, p. 500). Dymski provides a model of banking that he believes is consistent with Post Keynesian theory. He assumes two roles for banks: (1) banks pool risks and provide liquidity to depositors; and (2) banks gather private information regarding the credit worthiness of borrowers, and act as intermediaries to "transfer purchasing power to bank-funded borrowers" (p. 505). I will argue that Dymski's focus on the micro aspects of banking leads to incorrect conclusions regarding the macro foundations of banking: his banks are not "Keynesian." Furthermore, his presentation is inconsistent with the Post Keynesian theory of money. Dymski provides a role for money, but provides no theory regarding what constitutes money, what determines the quantity of money, nor how money is created. Dymski's use of terms like money and liquidity differs from the definitions normally used by Post Keynesians. Dymski should substitute the term currency for the terms money and liquidity. In his model, depositors deposit currency, which banks hold as a reserve against

The Determinants of Output Expansion in the Nigerian Manufacturing Industries

Abstract: The study investigates the determinants of output expansion in the Nigerian manufacturing industries between 1980-2010. OLS method was adopted and important determinants were detected. One of the important findings of the preceding analysis is that inflation rate plays the highest significant role in explaining manufacturing output expansion between 1980 -2010. Any policy measure that can curb inflation will surely increase output. Real GDP and per capita real GDP have positive and significant roles to play in the manufacturing output expansion. The inverse relationship between output expansion and capacity utilization in manufacturing is not surprising. Low demand due to ineffective purchasing power caused by inflation will result into excess capacity. A negative relationship between this variable and manufacturing output expansion is not surprising, simply because, if inflation is growing there will be higher prices which could increase the value of output at the expense of lower capacity and lower demand. The significance of the study lies on the fact that if the determinants of output expansion in the manufacturing industries are known, then, policies could be introduced to take care of them and thereby strengthened the position of the manufacturing sector. This could lead to output expansion and employment generationKeywords: manufacturing, capacity utilization, labour supply, export, competitiveness(ProQuest: ... denotes formulae omitted.)INTRODUCTIONManufacturing plays a dominant role among other sectors of the economy. It signifies modernization in terms of production and distribution. This singular sector has many dynamic benefits that are crucial for economic transformation. It is one of the sectors where forward and backward linkages can effectively take place. According to Ogwuma (1995), the manufacturing sector has a wider and more effective linkage among different sectors. This sector also create investment capital at a faster rate than any other sector of the economy. In terms of its contribution to GDP, the manufacturing sector is very important.Early effort in the manufacturing sector were actually oriented towards the adoption of an import substitution strategy in which light industries and assembly related manufacturing ventures were embarked upon by the former colonial masters companies. Being a leading sector in any economy, this position must be maintained. To maintain it will depend on the productivity of this sector, the level of output and its competitive position. The focus of this study is on the determinants of output expansion in the Nigerian manufacturing sector. The objective is to determine those factors that the determine output expansion, whereby improvement could be recommended for greater output in this sector. The whole essence is to promote economic development at national level.The structural Adjustment Programme (SAP) which was introduced in 1986 by the Nigerian government was partly designed to address some of the problems of the manufacturing sector. The aim was to revitalize the manufacturing sector by shifting emphasis on the domestic sourcing of inputs by this sector. A way of motivating the sector to adopt this strategy, incentives were given to firms that comply. These incentives included monetary and fiscal incentives. Looking at the manufacturing sector over the years, it could be seen that the contribution of the sector in terms of its shares in GDP has been relatively low recording in 1970 (9%) in 1980 (10%) in 1990 (8%) in 1998 (6%) in 2004 (3.7), in 2008 (4.9).The capacity utilization fell below54% in 2008 and 2010 respectively. (CBN documents).OBJECTIVE OF THE STUDYThe main objective of this study is to establish those determinants of manufacturing output expansion and also to determine the extent of the impact of each of the determinants of manufacturing output performance.LITERATURE REVIEWThe importance of manufacturing can be examined from various angles. …

What Makes Cities Healthy

Abstract: The benefits of good health to individuals and to society are strongly positive and improving the health of the poor is a key Millennium Development Goal. A typical health strategy advocated by some is increased public spending on health targeted to favor the poor and backed by foreign assistance, as well as by an international effort to perfect drugs and vaccines to ameliorate infectious diseases bedeviling the developing nations. But if the objective is better health outcomes at the least cost and a reduction in urban health inequity, the authors' research suggests that the four most potent policy interventions are: water and sanitation systems; urban land use and transport planning; effective primary care and health programs aimed at influencing diets and lifestyles; and education. The payoff from these four in terms of health outcomes dwarf the returns from new drugs and curative hospital-based medicine, although these certainly have their place in a modern urban health system. And the authors find that the resource requirements for successful health care policies are likely to depend on an acceleration of economic growth rates which increase household purchasing power and enlarge the pool of resources available to national and subnational governments to invest in health-related infrastructure and services. Thus, an acceleration of growth rates may be necessary to sustain a viable urban health strategy which is equitable and to ensure steady gains in health outcomes.