Book value and Lowflation: Difference between pages

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imported>Doug Williamson
(Add quote. Source: Bank of England https://www.bankofengland.co.uk/-/media/boe/files/speech/2020/covid-19-and-monetary-policy-speech-by-michael-saunders.pdf?la=en&hash=02111FB09D7C30180137C228BB61E8C5447A84F9)
 
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The value as recorded in a company’s books, in other words its accounts including its published balance sheet.
''Economics.''


A situation in which inflation is positive, but very low, for example below the (positive) inflation target of the central bank. 


Historically, the book value of an asset was generally its original cost less any depreciation or other write-down in value. 


This was distinct from - and could be very different from - prevailing market value, the fair market price which the asset might be expected to raise if offered for sale.
:<span style="color:#4B0082">'''''The economic impacts of Covid-19 to date'''''</span>


:"At present, if we overdo the stimulus somewhat and then find the economy recovers strongly, we have ample tools and time to tighten policy again before persistent excess demand and inflation become a problem ...


In order to address the problems arising from differences between book values and market values, accounting practice has moved substantially toward a system of book valuation which is aligned much more closely with market values.
:Conversely, if we provide too little stimulus, the economy could slip into a lowflation trap that is much harder to escape, with greater long-term costs from business failures and high unemployment."
 
:''Michael Saunders, External Member of the Bank of England's Monetary Policy Committee (MPC), May 2020.''




== See also ==
== See also ==
* [[Book entry]]
* [[Bank of England]]
* [[Equity]]
* [[Central bank]]
* [[Fair value]]
* [[COVID-19]]
* [[Market value]]
* [[Deflation]]
* [[Market value added]]
* [[Inflation]]
* [[Net book value]]
* [[Inflation target]]
* [[Return on capital employed]]
* [[Monetary Policy Committee]]
* [[Shareholders’ funds]]
* [[Stagflation]]
* [[Write down]]
* [[Tightening]]
* [[ZLB problem]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Financial_products_and_markets]]

Latest revision as of 10:43, 12 June 2020

Economics.

A situation in which inflation is positive, but very low, for example below the (positive) inflation target of the central bank.


The economic impacts of Covid-19 to date
"At present, if we overdo the stimulus somewhat and then find the economy recovers strongly, we have ample tools and time to tighten policy again before persistent excess demand and inflation become a problem ...
Conversely, if we provide too little stimulus, the economy could slip into a lowflation trap that is much harder to escape, with greater long-term costs from business failures and high unemployment."
Michael Saunders, External Member of the Bank of England's Monetary Policy Committee (MPC), May 2020.


See also

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