Nominal
in sentence
688 examples of Nominal in a sentence
But why would investors accept a negative
nominal
return for three, five, or even ten years?
In Switzerland and Denmark, investors want exposure to a currency that is expected to appreciate in
nominal
terms.
If you were holding Swiss franc assets at a negative
nominal
return right before its central bank abandoned its euro peg in mid-January, you could have made a 20% return overnight; a negative
nominal
return is a small price to pay for a large capital gain.
Of course, negative returns make their balance sheets shakier: a defined-benefit pension plan needs positive returns to break even, and when most of its assets yield a negative
nominal
return, such results become increasingly difficult to achieve.
Even if their
nominal
returns are negative, they must defer to safety.
Over time, of course, negative
nominal
and real returns may lead savers to save less and spend more.
The longer such policies are postponed, the longer we may inhabit the inverted world of negative
nominal
interest rates.
The experience of the Great Recession tells us what to expect from financial markets when output plummets: as inflation tumbles, so do
nominal
and real (inflation-protected) yields on Treasury bills.
Then suppose that inflation and real growth were steady at 1% each, so that
nominal
GDP grows at 2%.
And economic theory suggests that at some point, bond yields should be higher than
nominal
GDP growth.
And, if the price level should fall, a newly issued TIPS bond will return the original
nominal
purchase price, thus providing a hedge against deflation.
From 2009 to 2013, German
nominal
wages increased by more than 14%, compared to 4% in Spain.
This focus on quality could explain why German exports rebounded quickly after 2009, despite the rise in
nominal
wages.
But even if supply-side growth were maintained, say, by China, thereby holding down prices of tradable goods, helicopter money would carry major costs, because debt would still be growing faster than
nominal
GDP.
Today, average
nominal
wages in the eight post-communist EU countries are about one-fifth of the West European level and often only a quarter to a half of Western levels of social assistance.
Currently their
nominal
wages are only about 7% of the West European average.
Klaus and a small team of associates came up with the brilliant idea of selling vouchers at a
nominal
price to the general public that they could use to bid for shares in different companies.
They recognized that their countries’ debt-reduction prospects depended on
nominal
economic growth, and that their economic-growth prospects – not to mention continued peace – depended on a worldwide recovery.
But that statement, amazingly, ignored Spain’s higher pre-euro inflation – thus confusing real and
nominal
rates – and more rapid GDP growth.
From November 2008 to November 2014, successive QE programs added $3.6 trillion to the Fed’s balance sheet, nearly 25% more than the $2.9 trillion expansion of
nominal
GDP over the same period.
The ensuing massive bank bailout, plus continued budget deficits and declining
nominal
GNP, means that Ireland’s debt is ballooning, while its capacity to pay has collapsed.
Will political change occur when per capita
nominal
GDP, now at roughly $7,000, approaches $10,000, as occurred in neighboring South Korea and Taiwan?
The problem is that, despite commitment to the talks from all six participants – China, the United States, South Korea, Japan, Russia, and even North Korea in recent months (a
nominal
pledge that is unlikely to be changed as a result of Kim Jong-il’s passing) – the results so far are insufficient to sustain the process.
Eleven European countries chose to give up their national currencies (or, more technically, the
nominal
exchange rate).
As the Nobel laureate economist Robert Mundell and others spelled out in the 1960’s, relinquishing
nominal
exchange rates emphasizes three alternative mechanisms to cushion regional adjustment: inter-regional fiscal transfers, intra-union migration, and, most importantly, labor markets capable of adapting to shocks.
Policymakers will have to worry about a strange beast called “stag-deflation” (a combination of economic stagnation/recession and deflation); about liquidity traps (when official interest rates become so close to zero that traditional monetary policy loses effectiveness); and about debt deflation (the rise in the real value of
nominal
debts, increasing the risk of bankruptcy for distressed households, firms, financial institutions, and governments).
Likewise, until 2006, most Americans based their economic behavior on the assumption that
nominal
housing prices, even if they slowed, would not fall, because they had not done so before – within living memory in the US.
So, if ECB President Mario Draghi wants to highlight the fact that
nominal
interest rates are lower today than last August, he must also acknowledge that, given low inflation expectations, real interest rates have moved little.
If the real (inflation-adjusted) value of
nominal
debts increases, more debtors could fall into bankruptcy.
After the economic crisis of 2001, the authorities fixed the price of energy in
nominal
pesos and kept it there for years, even though inflation was running at 20% or more (according to independent estimates, that is; official figures are cooked to show lower inflation).
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