A multiresolution analysis of NeoFisher effects in industrialized economies: Have monetary policy dynamics being misconstrued in the west?
Abstract Central Banks in major industrialized economies have struggled to keep inflation within their target ranges since the global financial crisis. The periods of missing inflation and deflation experienced in the post-crisis era have led to doubts about the traditional Fisher effect as a crucia...
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SpringerOpen
2024-05-01
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| Series: | Future Business Journal |
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| Online Access: | https://doi.org/10.1186/s43093-024-00335-3 |
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| author | Andrew Phiri |
| author_facet | Andrew Phiri |
| author_sort | Andrew Phiri |
| collection | DOAJ |
| description | Abstract Central Banks in major industrialized economies have struggled to keep inflation within their target ranges since the global financial crisis. The periods of missing inflation and deflation experienced in the post-crisis era have led to doubts about the traditional Fisher effect as a crucial component of the policy reaction function. We explore the NeoFisherian theory, which suggests an alternative causal relationship between the policy rate and inflation. We focus on the USA, UK, and EU and apply wavelet coherence analysis to examine the time–frequency lead–lag comovements on data spanning from January 2007 to March 2023. Our findings indicate increasing NeoFisherian dynamics, notably post-2013 taper tantrum, implying that Central Banks in industrialized economies have misunderstood monetary policy dynamics. |
| format | Article |
| id | doaj-art-d315140ed8be42c7aa35c8a2b0bbf254 |
| institution | Kabale University |
| issn | 2314-7202 2314-7210 |
| language | English |
| publishDate | 2024-05-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Future Business Journal |
| spelling | doaj-art-d315140ed8be42c7aa35c8a2b0bbf2542025-08-20T03:53:58ZengSpringerOpenFuture Business Journal2314-72022314-72102024-05-0110112110.1186/s43093-024-00335-3A multiresolution analysis of NeoFisher effects in industrialized economies: Have monetary policy dynamics being misconstrued in the west?Andrew Phiri0Department of Economics, Faculty of Business and Economic Studies, Nelson Mandela UniversityAbstract Central Banks in major industrialized economies have struggled to keep inflation within their target ranges since the global financial crisis. The periods of missing inflation and deflation experienced in the post-crisis era have led to doubts about the traditional Fisher effect as a crucial component of the policy reaction function. We explore the NeoFisherian theory, which suggests an alternative causal relationship between the policy rate and inflation. We focus on the USA, UK, and EU and apply wavelet coherence analysis to examine the time–frequency lead–lag comovements on data spanning from January 2007 to March 2023. Our findings indicate increasing NeoFisherian dynamics, notably post-2013 taper tantrum, implying that Central Banks in industrialized economies have misunderstood monetary policy dynamics.https://doi.org/10.1186/s43093-024-00335-3NeoFisher effectInflationInterest ratesMorlet waveletsUSAUK |
| spellingShingle | Andrew Phiri A multiresolution analysis of NeoFisher effects in industrialized economies: Have monetary policy dynamics being misconstrued in the west? Future Business Journal NeoFisher effect Inflation Interest rates Morlet wavelets USA UK |
| title | A multiresolution analysis of NeoFisher effects in industrialized economies: Have monetary policy dynamics being misconstrued in the west? |
| title_full | A multiresolution analysis of NeoFisher effects in industrialized economies: Have monetary policy dynamics being misconstrued in the west? |
| title_fullStr | A multiresolution analysis of NeoFisher effects in industrialized economies: Have monetary policy dynamics being misconstrued in the west? |
| title_full_unstemmed | A multiresolution analysis of NeoFisher effects in industrialized economies: Have monetary policy dynamics being misconstrued in the west? |
| title_short | A multiresolution analysis of NeoFisher effects in industrialized economies: Have monetary policy dynamics being misconstrued in the west? |
| title_sort | multiresolution analysis of neofisher effects in industrialized economies have monetary policy dynamics being misconstrued in the west |
| topic | NeoFisher effect Inflation Interest rates Morlet wavelets USA UK |
| url | https://doi.org/10.1186/s43093-024-00335-3 |
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