Sentences with phrase «nominal growth rate of»

In that case the economy would need to slow two full percentage points, to a nominal growth rate of 3.6 %, to match the longer - term average.

Your income stream will come within about 1 % of the initial dividend yield plus the annualized, nominal growth rate of the dividend minus the inflation rate.

Since 1950 (actually, since the 1940s), S&P 500 dividends have had a remarkably steady nominal growth rate of 5 % per year.

The Investment Return equals (0.6 * the initial dividend yield of Stock A + 0.4 * [the 2 % real TIPS interest rate + the 3.0 % inflation rate]-RRB- + (0.6 * the nominal growth rate of the Stock A dividends + 0.4 * the growth rate of TIPS (which equals the 3 % inflation rate)-- the 3.0 % inflation rate.

In that case the economy would need to slow two full percentage points, to a nominal growth rate of 3.6 %, to match the longer - term average.

Not exact matches

If the Fed were to adopt an operating policy of achieving a steady rate of growth in nominal thin - air credit, it could return to its prior anonymity.

«A decrease in nominal GDP growth resulting solely from a one - year, 1 - percentage - point decrease in the rate of GDP inflation» reduces the budgetary balance by $ 1.9 billion.

After accounting for the impacts of measures and adjustments, the Sales Tax revenue base is projected to grow at an average annual rate of 4.3 per cent over the forecast period, roughly consistent with the average annual growth in nominal consumption of 4.0 per cent over this period.

Finally, in a nominal GDP targeting regime, a decline in r - star caused by slower trend growth automatically leads to a higher rate of trend inflation, providing a larger buffer to respond to economic downturns.

This occurs when the nominal interest rate is equal to the growth rate of nominal wages.

There is, of course, a great deal of skepticism about the 7 % real GDP growth rate that China has reported, but we should remember that in the first quarter, nominal GDP growth was much lower, 5.8 %.

Because nominal wage growth for a large fraction of workers has been held to zero, a somewhat higher rate of inflation would grease the wheels of the labor market by allowing real wages to fall (Akerlof, Dickens, and Perry 1996).

In this case the «cost» of financial repression to households was the gap between nominal GDP growth and nominal lending rates, plus an additional 1 - 1.5 % to account for the larger than normal gap between the lending rate and the deposit rate.

While stocks have a terminal value beyond a 10 - year period, the effects of interest rates and nominal growth on those projections largely cancel out because higher nominal GDP growth over a given 10 - year horizon is correlated with both higher interest rates and generally lower market valuations at the end of that period.

Most importantly, with nominal GDP growth rates having dropped from 20 % to 8 - 9 % the greatest of all the distortions, the interest rate distortion, has been the one most dramatically to adjust in the past three years.

First, it is now much harder for borrowers to justify investment in non-productive projects because they can no longer count on the huge gap between nominal GDP growth and the lending rate to bail them out of bad investments.

The more appropriate measure of financial repression is not the deflator, whichever one we choose to use, but rather very roughly the gap between the nominal lending rate and the nominal GDP growth rate, the latter of which broadly represents the return on investment within the economy.

Well, we know that earnings, revenues, and nominal GDP have historically proceeded at a peak - to - peak growth rate of 6 % annually across economic cycles.

But regardless of the debate, the point to remember is that when the nominal lending rate is much below the nominal GDP growth rate, two very important things happen.

Because low - risk investments return roughly 20 % on average in a country with 20 % nominal GDP growth, financial repression means that the benefits of growth are unfairly distributed between savers (who get just the deposit rate, say 3 %), banks, who get the spread between the lending and the deposit rate (say 3.5 %) and the borrower, who gets everything else (13.5 % in this case, assuming he takes little risk — even more if he takes risk).

Because I think China's nominal GDP growth has been overstated by a substantial amount because of its systematic failure to write down bad loans, I usually have subtracted 2 - 4 percentage points from the nominal GDP growth rate before I did my very rough calculation.

It is only when credit growth begins to decelerate much more rapidly than nominal GDP growth that we can begin to talk hopefully about China's moving in the right direction, and it is only when credit growth falls permanently below the growth rate of the economy's debt - servicing capacity that China will have adjusted.

At a federal - provincial finance ministers» meeting in December 2012, the Finance Minister announced that, starting in 2017 - 18, the rate of growth in the Canada Health Transfer (CHT) would be reduced from 6 per cent per year to grow in line with a three - year moving average in nominal GDP, with a funding guarantee to grow by at least three per cent per year.

While there are some signs of recognition such as the Fed's reduction in its estimated neutral rate from 4.5 percent to 3.0 percent during the last 2 years, the IMF's explicit use of the term secular stagnation in its World Economic Outlook, ECB president Mario Draghi's call for global coordination and greater use of fiscal policy, and Japan's indicated interest in fiscal - monetary cooperation, policymakers still have not made sufficiently radical adjustments in their world view to reflect this new reality of a world where generating adequate nominal GDP growth is likely to be the primary macroeconomic policy challenge for the next decade.

In the 2006 Budget, the government promised to reduce the deficit by $ 3 billion per year; to reduce the federal debt - to - GDP ratio to 25 per cent by 2012 - 13; to eliminate the total government sector debt (which includes the federal, provincial and local governments as well as the Canada and Quebec pension plans) by 2021; and finally, to keep the growth in program expenses below the rate of growth in nominal GDP.

But I really was convinced of my math, which connected iron ore prices inexorably with the extraordinarily large gap between China's Nominal GDP growth and interest rates set by the PBoC, and it was clearly impossible to maintain this gap.

Even if the growth rates of nominal GDP and U.S. corporate revenues (including foreign revenues) over the coming 20 years match their 4 % growth rate of the past 20 years, and even if the most reliable valuation measures merely touch their historical norms 20 years from today, the S&P 500 Index two decades from now will trade more than 20 % lower than where it trades today.

Then again, a sustained period of suppressed interest rates is only likely in a continued environment of restrained nominal economic growth.

Historically, those interest rate and nominal growth effects have largely offset, which is why Market Cap / GVA has been reliably correlated with actual 10 - year S&P 500 nominal total returns regardless of the prevailing level of interest rates.

This could include setting targets for nominal GDP growth rather than inflation, investing in a wider range of risk assets, making plans to allow base rates to turn negative, and underscoring the importance of avoiding a new recession.

The private sector economists are surveyed for only a selective number of aggregate economic and financial indicators: real gross domestic product (GDP) growth; GDP inflation, nominal GDP;, the 3 - month treasury bill rate;, the 10 - year government bond rate;, the unemployment rate; the, consumer price index; the exchange rate (US cents / Cdn $); and finally, and U.S. real GDP growth.

That alternative, which Market Monetarists like David Beckworth, Lars Christensen, and Scott Sumner have been pushing ever since the Great Recession started, is for the FOMC to keep its collective eye, not on the inflation rate, but on the level and growth rate of nominal GNP — a measure of the flow of spending on goods and services in the economy.

If I assume a dividend growth rate of 6 percent (about the long - run average *), the current S&P 500 dividend yield of 2.1 percent (from multpl.com), a terminal S&P 500 dividend yield of 4 percent (Hussman says that the dividend yield on stocks has historically averaged about 4 percent), the expected nominal return over ten years is 2.4 percent annually.

Other factors driving rates lower — low nominal global growth, an older population, lower fixed income supply and the disinflationary pressure of technology — will likely remain in place.

The large nominal exchange rate appreciation also helped to contain inflationary pressures in an environment of strong growth in domestic demand and a decline in the unemployment rate to relatively low levels.

This is a percentage point lower than average potential growth in the decade prior to the crisis... We estimate that the real neutral policy rate is currently in the range of 1 to 2 per cent... This translates into a nominal neutral policy rate of 3 to 4 per cent, down from a range of 4 1/2 to 5 1/2 per cent in the period prior to the crisis.»

Indeed, because the level of interest rates at any point in time is highly correlated with the level of nominal economic growth over the preceding decade, the relationship between starting valuations and actual subsequent S&P 500 nominal total returns is nearly independent of interest rates.

In 1991, the nominal GDP growth rate hit a low of 2.9 %.

Our model indicates that going forward, long - term yields will likely be subject to three upward pressures: (1) Our forecasted increase in inflation will boost nominal GDP growth; (2) As forward guidance is replaced by a data - dependent monetary tightening, volatility in short rates will increase; and (3) As the impact of QE on the Treasury market fades, long - term yields will trend back to their historical link with nominal GDP growth.

Looking back over the past 60 years, the level of nominal growth has been the key to understanding the level of rates.

During this period, a smoothed average of nominal growth explains almost 60 % of the variation in long - term rates (see the chart below).

As Bank of Japan governor Haruhiko Kuroda put it: «With the level of nominal interest rates being high, Japan's economy will have more policy room to mitigate the impact of future economic downturns, or will be equipped with a sort of insurance for sustained economic growth.»

The level of yields — around 4 1/4 per cent at present — looks low not only on historical comparisons but also relative to normal benchmarks such as the growth rate of nominal GDP, which in the US is currently around 6 per cent (Graph 16).

I should note that in each of these models, we're assuming a long - term growth rate for cyclically - adjusted earnings, revenues, dividends, nominal GDP and so forth of about 6.3 % annually.

During the «Great Moderation» (1987 — 2006), under Fed chairman Alan Greenspan, the trend rate of growth of final demand, as measured by nominal final sales to domestic purchasers (FSDP), was 5.4 percent per year — split into real growth of 3 percent and inflation of 2.4 percent.

But as I noted last week (see Two Point Three Sigmas Above the Norm), nominal growth and interest rate variations have historically canceled out over the past century, with little effect on the accuracy of our valuation estimates — matched reductions in the growth rate and the discount rate really don't affect fair value.

Now add the nominal GDP growth rate of 3 % real plus 2 % inflation.

In 2015, with a growth rate of 6.7 per cent, China produced additional nominal output of US$ 552 billion.

The data is unambiguous on current economic conditions - GDP growth in the last quarter of 2015 was a meager 2.11 % with full year growth of 2.79 % according to the National Bureau of Statistics (NBS); inflation rose sharply to 11.4 % in February with prospects of reaching 12 % by March; capital markets have remained bearish; according to UNCTAD Nigeria's FDI fell by 27.7 % to $ 3.4 billion in 2015, and on current trends may fall even more precipitously in 2016; the de facto exchange rate of the Naira for most producers and consumers is now N322 / $ even though CBN maintains a nominal N197 / $ for privileged persons; several economic sectors - construction, government, manufacturing, oil and gas and hotels and restaurants are in recession or barely out of it; government's official foreign reserves is down to $ 27.8 bn; and unemployment and under - employment rates have worsened 10.4 % and 18.7 % by the end of 2015.

According to Nielsen Bookscan, sales were up 1.65 % in the first quarter of 2015, but this can only be seen as nominal growth as the official inflation rate was pegged at 6.41 % last year, the market size actually decreased when compared to 2014.