Our study examines the impact of the Inflation Reduction Act (IRA) on shareholder wealth and corporate agency costs. The IRA, signed into law on August 16, 2022, represents the first time in U.S. history that stock repurchases became subject to excise taxes. The stated goal of this new tax was...

This paper shows that the effect of inflation on asset prices and real aggregates depends on the financial intermediation sector. When firms finance using nominal long-term debt issued by financial intermediaries, unexpected changes in inflation lead to a wealth transfer across sectors. Higher...

When valuing firms through discounted cash flow, it is common to estimate the terminal value through the Gordon model. Some authors propose to adapt such model in the presence of inflation and for two particular cases: zero real growth and real growth through zero net present value projects. The...

We revisit the role of long-term nominal corporate debt for the transmission of inflation shocks in the general equilibrium model of Gomes, Jermann, and Schmid (2016). We show that inaccuracies in the model solution and calibration strategy lead GJS to a model equilibrium in which nominal...

This paper investigates the dynamics of aggregate wages and prices in the UnitedStates (US) and the Euro Area (EA) with a special focus on persistence of real wages,wage and price inflation. The analysis is conducted within a structural vector errorcorrectionmodel, where the structural shocks...

This paper extends Galí and Gertler’s (1999) new hybrid KeynesianPhillips curve to the open economy context. We hypothesise that pricing decisionsdepend on both labour costs and intermediate imported input prices. The results forHong Kong are consistent with the theory if import prices are...

The purpose of this paper is to compare the accuracy of the three types of models: Autoregressive Integrated Moving Average (ARIMA) models, Holt-Winters models and Neural Network Auto-Regressive (NNAR) models in forcasting the Harmonized Index of Consumer Prices (HICP) for the countries of...

This paper employs an augmented version of the UECCC GARCH specificationproposed in Conrad and Karanasos (2010) which allows for lagged in-mean effects,level effects as well as asymmetries in the conditional variances. In this unifiedframework we examine the twelve potential intertemporal...

This paper employs the unrestricted extended constant conditional correlationGARCH specification proposed in Conrad and Karanasos (2008) to examine theintertemporal relationship between the uncertainties of in°ation and output growthin the US. We find that inflation uncertainty effects output...