When a currency drops, the nominal price of hard assets in that currency generally rises.
When it falls in value the nominal price of commodities zooms up, with the poor being hurt disproportionately.
He found that the conventionally measured nominal price of light, metered in dollars per lumen per watt, rose by a factor of three to five between 1800 and 1992.
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Moreover, the price of a letter remained constant in nominal terms, representing a big price reduction in real terms.
And since it is hard to cut nominal wage rates, price stability could put a floor beneath real wages.
To get there, with the monetary base unchanged, you would have to increase nominal GDP (mostly through price increases) by 70%.
All manner of electronic gear, for example, falls in price, even in nominal (non-inflation adjusted) terms.
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Monetizing debt and allocating credit, rather than stabilizing the growth of nominal demand and achieving long-run price stability, have brought the Fed into dangerous waters.
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Although the interest rate is 0% to 0.1%, average deflation of -1.3% in the past 15 years means that the real interest rate (nominal interest rate 0% minus the price change of -1.3%) is a positive 1.3%.
With nominal rates at zero, and core consumer-price inflation at 0.5%, you are still paid to borrow.
"In nominal terms, we haven't had a price drop like this nationally since the Great Depression, " says Humphries.
In theory, a discretionary central bank could limit the quantity of money and achieve long-run price stability by controlling the growth of nominal final demand.
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Rather than engaging in pure monetary policy to ensure long-run price stability and prevent erratic changes in nominal GDP, the U.S. central bank has engaged in fiscal policy by allocating credit to favored groups and thus politicized monetary policy.
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And we can place a price on it too: 15% of the nominal value of the bonds.
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It is important to note that the nominal yield does not estimate return accurately unless the current bond price is the same as its par value.
But in the case of goods that change in quality every year, it is much harder to split an increase in nominal ouput or spending between a change in volume and a change in price.
The results change a little whether you use nominal GDP per head (ie, just the plain numbers ) or PPP adjusted (to take account of different price levels) but the are a number of countries in Europe with higher GDP per capita than Germany.
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