The present paper is an initiative to pin down major factors behind exorbitant inflationary pressures in the global economy. The paper mentions that among other factors productivity shocks, external shocks, inflationary expectations and conversion of food crops into fuel generation are the major drivers of inflation (especially food inflation) in the present inflationary era. An attempt is also made to offer some short and medium to long term policy recommendations in this regard. Especially, the acquisition of internal growth momentum is emphasized to absorb the severity of imported inflation in the global economy as well as in Pakistan’s economic scenario. Last but not the least, the paper highlights that inflationary pressures are more sensitive to the productivity shocks than the impact of monetary policy operations in the short run and therefore, supply side measures along with monetary policy operations are important to control inflationary stance in the emerging economies including Pakistan.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
9981.
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Find related papers by JEL classification: E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
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