Nominal
in sentence
688 examples of Nominal in a sentence
Thus, one Russian institute alone subsidized America with scientists with a
nominal
value of $1.5billion!
It could even start moving to a more holistic operational measure (say,
nominal
GDP), together with indicators of the economy’s structural fragility.
So, not only is public debt set to increase much faster than
nominal
GDP growth, but governments will have to devote an increasing share of their revenues to interest payments.
The second factor to consider is
nominal
growth – that is, real growth plus inflation.
Under these circumstances, and with inflation subdued and interest rates on US Treasury securities far below their historical average in both
nominal
and real terms, the economic case for temporary fiscal measures to boost demand is compelling.
Nominal
GDP never stopped shrinking, public and private debt continued to become less and less sustainable, and all along investment and credit remained comatose.
Moreover, even if prices on average exhibit some downward flexibility, deflation necessarily increases the real rate of interest, given that
nominal
interest rates cannot fall below zero.
Summers’s Keynesian argument is that the problem is a chronic aggregate-demand shortfall: Desired investment lags behind desired savings, even at near-zero
nominal
interest rates, resulting in a chronic liquidity trap.
But the yield curve in the major advanced economies is very flat, with both real and
nominal
longer-term rates at historic lows.
Because Brazil has some of the highest
nominal
and real interest rates in the world (interest payments on the public debt exceed 7% of GDP), snowballing debt dynamics are particularly tricky.
Although the zero
nominal
bound on interest rates – previously only a theoretical possibility – had been reached and zero-interest-rate policy (ZIRP) had been implemented, growth remained anemic.
Nominal
interest rates are now negative not only for overnight debt, but also for ten-year government bonds.
Indeed, about $6 trillion worth of government bonds around the world today have negative
nominal
yields.
This partly reflected
nominal
appreciation against the US dollar, together with effective appreciation against the euro, yen, Korean won, and other currencies as the US dollar strengthened relative to them.
The renminbi remains highly overvalued, despite August’s modest 3%
nominal
depreciation against the soaring US dollar.
The “troika” institutions (the European Commission, the European Central Bank, and the International Monetary Fund) have, over the years, relied on a process of backward induction: They set a date (say, the year 2020) and a target for the ratio of
nominal
debt to national income (say, 120%) that must be achieved before money markets are deemed ready to lend to Greece at reasonable rates.
The American Employment Cost index and other indicators of developed-country
nominal
wage growth show no acceleration of change.
Hence the need to look at the “real effective exchange rate,” or the
nominal
effective exchange rate adjusted for inflation.
The Assad regime has lost control of vast swaths of territory within the Syrian Arab Republic’s
nominal
borders, and it has little concern for the welfare of communities living in rebel-controlled territory, as evidenced by the Syrian Army’s indiscriminate violence toward civilians in those areas.
A ten-year Treasury has a
nominal
interest rate of less than 2%.
The most popular culprit is the Fed, which has begun to taper its highly experimental policy of “quantitative easing,” or purchases of long-term assets aimed at supporting growth beyond what could be achieved with zero
nominal
interest rates.
But now we have come to the most unconventional policy tool of them all: negative
nominal
interest rates.
And it is not just short-term policy rates that are now negative in
nominal
terms: about $3 trillion of assets in Europe and Japan, at maturities as long as ten years (in the case of Swiss government bonds), now have negative interest rates.
At first blush, this seems absurd: Why would anyone want to lend money for a negative
nominal
return when they could simply hold on to the cash and at least not lose in
nominal
terms?
When you hold a checking or current account in your bank at a zero interest rate – as most people do in advanced economies – the real return is negative (the
nominal
zero return minus inflation): a year from now, your cash balances buy you less goods than they do today.
And if you consider the fees that many banks impose on these accounts, the effective
nominal
return was already negative even before central banks went for negative
nominal
rates.
In other words, negative
nominal
rates merely make your return more negative than it already was.
Investors accept negative returns for the convenience of holding cash balances, so, in a sense, there is nothing new about negative
nominal
interest rates.
Moreover, if deflation were to become entrenched in the eurozone and other parts of the world, a negative
nominal
return could be associated with a positive real return.
Of course, this is true only so long as the
nominal
interest rate is not too negative; otherwise, switching to cash – despite the storage and safety costs – starts to make more sense.
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