inflationary gap

Examples of inflationary gap in the following topics:

• Macroeconomic Factors Influencing the Interest Rate

  • If the inflationary expectation goes up, then so does the market interest rate and vice versa.
  • The GDP gap or the output gap is (yt - y*t).
  • If this calculation yields a positive number, it is called an "inflationary gap" and indicates the growth of aggregate demand is outpacing the growth of aggregate supply (or high level of employment), possibly creating inflation, signaling an increase in interest rates made by the Central Bank; if the calculation yields a negative number it is called a "recessionary gap," which is accompanied by a low employment rate, possibly signifying deflation and a reduction in interest rates.
  • That is, the rule "recommends" a relatively high interest rate (a "tight" monetary policy) when inflation is above its target or when output is above its full-employment level, in order to reduce inflationary pressure.

• Drivers of Market Interest Rates

  • Market interest rates are mostly driven by inflationary expectations, alternative investments, risk of investment, and liquidity preference.
  • Inflationary expectations: Most economies generally exhibit inflation, meaning a given amount of money buys fewer goods in the future than it will now.
  • If the inflationary expectation goes up, then so does the market interest rate and vice versa.
  • However, economists generally agree that the interest rates yielded by any investment take into account: the risk-free cost of capital, inflationary expectations, the level of risk in the investment, and the costs of the transaction.
  • where in is the nominal interest rate on a given investment, ir is the risk-free return to capital, pe = inflationary expectations, i*n = the nominal interest rate on a short-term risk-free liquid bond (such as U.S.

• The Yield Curve

  • This expectation of higher inflation leads to expectations that the central bank will tighten monetary policy by raising short term interest rates in the future to slow economic growth and dampen inflationary pressure.
  • In situations when this gap increases, the economy is expected to improve quickly in the future.

• Gap Junctions

  • Gap junctions are also called communicating junctions, macula communicans, or nexuses. 
  • The number of gap junctions shared between two cells can vary as well.
  • The channels in a gap junction aren’t always open. 
  • Gap junctions are found in many places throughout the body. 
  • Gap junctions are responsible for electrochemical and metabolic coupling.

• Learning the Gender Gap

  • This implies that the gender gap stems from social, rather than biological, origins.
  • In order to determine whether the gender gap is a result of implicit or explicit discrimination, we can look at the adjusted and unadjusted wage gap.
  • The remaining part of the raw wage gap that cannot be explained by variables that are thought to influence pay is then referred to as the adjusted gender pay gap and may be explicitly discriminatory.
  • The total wage gap in the United States is 20.4 percent.
  • This PSA by the European Union illustrates the gender pay gap in Europe.

• The Gap Model

  • The Service Quality Model, also known as the GAP Model, was developed in 1985.
  • Gap between consumer expectation and management perception: This gap arises when the management or service provider does not correctly perceive what the customer wants or needs.
  • Gap between service quality specification and service delivery: This gap may arise in situations pertaining to the service personnel.
  • Gap between expected service and experienced service: This gap arises when the consumer misinterprets the service quality.
  • The diagram shows the different gaps in the model, including the Knowledge Gap discussed here.

• The RATER Model

  • Gap 1: The management perception gap, or the difference between the service customers expect and management's perception of customer expectations.
  • Gap 2: The quality specification gap.
  • Gap 3: The service delivery gap.
  • Gap 4: The market communication gap.
  • Gap 5: The perceived service quality gap.

• Gaps in the Fossil Record

  • Romer's gap is an example of an apparent gap in the tetrapod fossil record used in the study of evolutionary biology.
  • These gaps represent periods from which no relevant fossils have been found.
  • Romer's gap is named after paleontologist Alfred Romer, who first recognized it.
  • Romer's gap spanned from approximately 360 to 345 million years ago, corresponding to the first 15 million years of the Carboniferous Period.
  • The bank of the Whiteadder Water in Scotland is one of the few known localities bearing fossils of tetrapods from Romer's gap.

• The Economy and the Silver Solution

  • Its advocates were in favor of an inflationary monetary policy using the "free coinage of silver" as opposed to the less inflationary Gold Standard.
  • The question was whether or not this inflationary measure would be beneficial.
  • Many populist organizations favored an inflationary monetary policy on the grounds that it would enable debtors, often farmers who had mortgages on their land, to pay their debts off with cheaper, more readily-available dollars.

• Family and Gender Issues

  • Social expectations that women manage childcare contribute to the gender pay gap and other limitations in professional life for women.
  • In the United States, there is an observable gender pay gap, such that women are compensated at lower rates for equal work as men.
  • The gender pay gap is measured as the ratio of female to male median yearly earnings among full-time, year-round (FTYR) workers.
  • Economists who have investigated the gender pay gap have also noted that women are more likely to choose jobs based on factors other than pay.
  • Recall at least three reasons why there might be a gender pay gap