Nominal
in sentence
688 examples of Nominal in a sentence
A Balance-Sheet Approach to Fiscal PolicyWASHINGTON, DC – Everyone is talking about debt, citing huge
nominal
figures that strongly affect public-policy debates worldwide.
Proponents of austerity currently use
nominal
debt figures to scare voters, even in countries with record-low interest rates and large private-sector profits that are not being channeled toward investment.
There is no longer any reason to let the zero bound on
nominal
interest rates continue to hamper monetary policy.
Presumably,
nominal
interest rates would move into negative territory only in response to a deep deflationary crisis.
The error is called the “money illusion ” – the belief that a
nominal
unit of currency is the best measure of value, even though its real value is unstable.
Though real annual GDP growth seems to have stabilized at around 7%, almost all key economic indicators – such as
nominal
GDP, fixed-asset investment, floor space under construction,
nominal
retail sales, auto sales, electricity output, railway cargo, and iron ore imports – are well below their four-year growth average.
As there is a zero lower bound to the
nominal
interest rate, the central bank may well find itself unable to drive the interest rate/inflation differential to a low enough level, which may result in a slump and even a downward spiral.
Unlike equity, a debt security is a
nominal
claim whose value does not vary depending on the inflation rate.
Assuming that Greece wishes to stay within the eurozone, an “internal devaluation,” i.e., a significant cut in
nominal
wages, is inevitable.
Three levers could be used to reach this goal: adjustment in
nominal
wages, extension of working time, and a reduction in social-security contributions (compensated for by an increase in value-added tax).
Though $3.6 trillion of incremental liquidity has been added to the Fed’s balance sheet since late 2008,
nominal
GDP was up by just $2.5 trillion from the third quarter of 2008 to the second quarter of this year.
With
nominal
GDP stagnating, that deficit is causing the debt/GDP ratio to rise by 10% annually.
Domestic deflation means that the real interest rate on Japanese bonds is higher than the
nominal
rate.
With Japanese prices rising and the yen falling relative to other currencies, investors will be willing to hold Japanese government bonds (JGBs) only if their
nominal
yield is significantly higher than it has been in the past.
Mountains and MinaretsNew York – Switzerland has four mosques with minarets and a population of 350.000
nominal
Muslims, mostly Europeans from Bosnia and Kosovo, of which about 13% regularly go to prayer.
But that will not be true this year, because consumer prices are falling, whereas the GDP deflator (and
nominal
GDP) is still increasing.
Since 1975, the
nominal
annual premium on the 30-year Treasury bill has averaged 2.2%: in other words, over its lifespan, the 30-year
nominal
T-bill yields are 2.2 percentage points more than the expected average of future short-term
nominal
T-bill rates.
The current 30-year T-bill yields 3.2% annually, which means that, unless the marginal bond buyer today is unusually averse to holding 30-year Treasuries, she anticipates that short-term
nominal
T-bill rates will average 1% per year over the next generation.
The US Federal Reserve keeps the short-term
nominal
T-bill rate near 1% only when the economy is depressed, capacity is slack, labor is idle, and the principal risk is deflation rather than upward pressure on prices.
Since WWII, the US unemployment rate has averaged 8% when the short-term
nominal
T-bill rate is 2% or lower.
It is neither here nor there to claim that “had the UK not used a labyrinth of rules and regulations to hold
nominal
interest rates on debt below inflation, its debt-to-GDP ratio might have risen over the period 1945-1955 instead of falling dramatically.”
And, indeed, imports have risen sharply as well, as the rupee’s appreciation lowers the relative price of foreign goods: in the first half of this year,
nominal
merchandise imports grew by 28%.
With lower
nominal
income and the same level of debt, the threat of default necessarily increases.
Unemployment harms workers, while the lower interest rates needed to generate more jobs may lead to higher inflation, which especially harms those with
nominal
assets whose value is eroded.
At the very least, the combination of higher interest rates in the shadow-banking sector and weaker
nominal
GDP growth undermines borrowers’ debt-repayment capacity.
While China may have the financial resources to cover its debt overhang, it risks being left with a low-to-middle-income economy, high debt levels, and
nominal
growth rates roughly two-thirds lower than the 17% average annual rate achieved in 2004-2011.
With the advanced economies no longer needing to maintain extraordinary monetary policies,
nominal
interest rates are set to climb from their current historic lows.
As it is, central banks can have difficulty attaining a sufficiently low real interest rate in recessions, because the
nominal
interest rate cannot go below zero.
If the US dollar weakens in relation with other major currencies, China may not need to adjust RMB's
nominal
rate for quite a while.
Total debt is still growing at a faster pace than
nominal
GDP.
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