Inflation Equation Research Articles

Spectrum of primordial gravitational waves in the presence of a cosmic string

In this paper we consider an inflating universe with long straight cosmic string along z-axis. We demonstrate that cosmic string's effect can be treated as a perturbation on the background of FRW metric. By performing cosmological perturbations on this inflating cosmic string background, we derived the linearized Einstein field equations. We show that at leading order (neglecting the mixing terms of cosmic string perturbations with gravitational tensor perturbations), the cosmic string appears as an inhomogeneous term on the right hand side of wave equation for tensor perturbations. Finally, by finding analytical solution of the wave equation for slow-roll inflation, we illustrate its impact on the spectrum of primordial gravitational waves.

Commodity prices and international Inflation, 1851–1913

This paper uses annual data to study the impact of commodity prices on consumer prices in 15 economies from 1851 to 1913. We calculate a simple measure of the common component of commodity prices which co-moves with the international business cycle and Granger causes consumer price inflation. Commodity prices are significant in standard inflation equations estimated by OLS in 14 of 15 economies. Estimating these equations using real shipping costs as an instrument suggests that commodity price movements associated with shifts in demand arising from international business cycles have a particularly large impact on inflation.

The historical role of energy in UK inflation and productivity with implications for price inflation

We model UK price and wage inflation, productivity and unemployment over a century and a half of data, selecting dynamics, relevant variables, non-linearities and location and trend shifts using indicator saturation estimation. The four congruent econometric equations highlight complex interacting empirical relations. The production function reveals a major role for energy inputs additional to capital and labour, and although the price inflation equation shows a small direct impact of energy prices, the substantial rise in oil and gas prices seen by mid-2022 contribute half of the increase in price inflation. We find empirical evidence for non-linear adjustments of real wages to inflation: a wage-price spiral kicks in when inflation exceeds about 6%–8% p.a. We also find an additional non-linear reaction to unemployment, consistent with involuntary unemployment. A reduction in energy availability simultaneously reduces output and exacerbates inflation.

Warm inflation driven by complex quintessence field within rastall gravity

This manuscript is devoted to examining the role of the “complex quintessence field” (CQF) in driving warm inflation (WI) within the Rastall theory of gravity (RTG). Recently, the accelerating cosmic expansion has been described by CQF, which is linked to several other cosmic scenarios. In this approach, we construct the corresponding dynamical equations for inflation using the flat Friedmann–Robertson–Walker (FRW) spacetime. We begin with a fundamental approach of selecting intermediate, logamediate, and power-law models to study how inflation is realized from these models. For each model, we find analytic solutions of the scalar field and corresponding effective potential necessary to produce inflation under slow-roll (SR) conditions. These solutions allow us to develop inflationary observable in the strong dissipative regime, including the SR parameters, e-folding number, scalar/tensor power spectra, scalar spectral index (ns) and its running (αs) and finally tensor to scalar ratio (r). We checked the impact of additional theory parameter λ on the evolutionary trajectories in ns−r and ns−αs planes for the underlying inflationary models. For all three models, it is concluded that CQF-inspired inflation in RTG provides interesting and feasible results which fully satisfy the Planck constraints.

Is the US Phillips curve stable? Evidence from Bayesian vector autoregressions*

AbstractIt has been claimed that the fall in US inflation during the Great Recession was surprisingly small. One possible explanation for this is that the Phillips curve is unstable and that its slope was lower around the Great Recession. We investigate the importance of time‐varying parameters using Bayesian vector autoregressions for inflation and unemployment. We find support for time variation in the inflation equation and an unstable Phillips curve that was somewhat flatter between 2005 and 2013. However, conditional forecasts mostly suggest that inflation was not unexpectedly high around the Great Recession, which puts the claim of a “missing disinflation” into question.

CEMAC’ta Finansal Sektör Gelişiminin Parasal İstikrar Hedefine Etkisi

The paper determines the role played by banking stabilization policies over the relationship between financial sector development and monetary stability objective. Applying generalised method of the moments (GMM) system of Blundell and Bond (1998) over the inflation equation constructed by Gallic and al (2017), we found that undesirable effects of financial sector development (credit risk) increase inflation rate in CEMAC. Besides, the negative relationship between financial sector development and monetary stability objective quoted in the literature is not reversed in CEMAC. The credit risks, the main cause of monetary instability and the main undesirable effects of financial sector development increase the inflation rate in CEMAC. Therefore, policymakers need to curb any increased of credit risks associated with financial sector development as this risk increase inflation in CEMAC.

SVARs with occasionally-binding constraints

We develop a structural VAR in which an occasionally-binding constraint generates censoring of one of the dependent variables. Once the censoring mechanism is triggered, we allow some of the coefficients for the remaining variables to change. We show that a necessary condition for a unique reduced form is that regression functions for the non-censored variables are continuous at the censoring point and that parameters satisfy some mild restrictions. In our application the censored variable is a nominal interest rate constrained by an effective lower bound (ELB). According to our estimates based on U.S. data, once the ELB becomes binding, the coefficients in the inflation equation change significantly, which translates into a change of the inflation responses to (unconventional) monetary policy and demand shocks. Our results suggest that the presence of the ELB is indeed empirically relevant for the propagation of shocks. We also obtain a shadow interest rate that shows a significant accommodation in the early phase of the Great Recession, followed by a mild and steady accommodation until liftoff in 2016.

Déterminants et effets économiques de l'inflation dans la CEMAC

Objective: The objective of this paper is to determine the sources and economic effects of inflation in the CEMAC. Methodology: The data analyzed come from the World Bank (World Development Indicator, 2017). The study covers the periods 1977-1994, 1995-2016 and 1977-2016. Two equations (an inflation equation and a growth equation) are estimated by the Generalized Moments Method (GMM) of Arellano and Bond (1991). Results: The results obtained show that inflation does not promote economic activity and comes mainly from trade with the outside world. Originality/relevance: This study analyzes inflation from two aspects (the determinants and the economic effects). It highlights the phenomenon of imported inflation, the control of which would improve the economic situation of the CEMAC countries. In addition, the study identifies the clauses of the African Continental Free Trade Area, which entered into force in 2021, as a factor that could constitute, among other things, a palliative solution to reducing said inflation.

Svars with Occasionally-Binding Constraints

We develop a structural VAR in which an occasionally-binding constraint generates censoring of one of the dependent variables. Once the censoring mechanism is triggered, we allow some of the coefficients for the remaining variables to change. We show that a necessary condition for a unique reduced form is that regression functions for the non-censored variables are continuous at the censoring point and that parameters satisfy some mild restrictions. In our application the censored variable is a nominal interest rate constrained by an effective lower bound (ELB). According to our estimates based on U.S. data, once the ELB becomes binding, the coefficients in the inflation equation change significantly, which translates into a change of the inflation responses to (unconventional) monetary policy and demand shocks. Our results suggest that the presence of the ELB is indeed empirically relevant for the propagation of shocks. We also obtain a shadow interest rate that shows a significant accommodation in the early parts of the Great Recession, followed by a mild and steady accommodation until liftoff in 2016.

Soft de Sitter Effective Theory

Calculating the quantum evolution of a de Sitter universe on superhorizon scales is notoriously difficult. To address this challenge, we introduce the Soft de Sitter Effective Theory (SdSET). This framework holds for superhorizon modes whose comoving momentum is far below the UV scale, which is set by the inverse comoving horizon. The SdSET is formulated using the same approach that yields the Heavy Quark Effective Theory. The degrees of freedom that capture the long wavelength dynamics are identified with the growing and decaying solutions to the equations of motion. The operator expansion is organized using a power counting scheme, and loops can be regulated while respecting the low energy symmetries. For massive quantum fields in a fixed de Sitter background, power counting implies that all interactions beyond the horizon are irrelevant. Alternatively, if the fields are very light, the leading interactions are at most marginal, and resumming the associated logarithms using (dynamical) renormalization group techniques yields the evolution equation for canonical stochastic inflation. The SdSET is also applicable to models where gravity is dynamical, including inflation. In this case, diffeomorphism invariance ensures that all interactions are irrelevant, trivially implying the all-orders conservation of adiabatic density fluctuations and gravitational waves. We briefly touch on the application to slow-roll eternal inflation by identifying novel relevant operators. This work serves to demystify many aspects of perturbation theory outside the horizon, and has a variety of applications to problems of cosmological interest.

Value Added Tax and Inflation in Ethiopia: Evidence from Granger Causality Analysis

The study investigates the causal relationship between Value added tax and inflation in Ethiopia using quarterly time-series data from 2004 to 2014. Data for this study was sourced from the National bank of Ethiopia (NBE) and the Central Statistical Agency of Ethiopia (CSA). The data is verified for unit root using the Augmented Dickey-Fuller (ADF) test and the Philips-Perron (PP) unit root test, and the result confirms that variables of the study are stationary in their first differences. The Pairwise Granger causality analysis revealed that VAT Granger causes inflation. The result from the VECM has shown that the speed of adjustment is negative 0.4790. This result infers that 47.9 percent of disturbances are corrected each quarter in the inflation (LOGCPI) equation. The sign of error correction term when VAT is dependent variable is negative but not significant at 5% level of significance ( -1.67359 and 0.1058, error correction term and t-probability respectively) showing only unidirectional causality running from Value added tax(VAT) to the price level in Ethiopia in long run. The coefficient of VAT from Wald coefficient restriction tests is different from zero indicating the causality from VAT to inflation in Ethiopia in the short run. This also indicates that causality running from lagged variables of Value added tax to the lagged level of price. The study concluded that there is a casual relationship between VAT and inflation in Ethiopia in both the short run and the long run during the period under investigation. The policy implication is that a very comprehensive post VAT cost-benefit analysis needs to be carried out in the process of public revenue generation. It follows that attention should be given to social welfare and communal desire alongside public income generation. Keywords: VAT, Inflation, Granger Causality Analysis, Ethiopia DOI: 10.7176/RJFA/11-21-03 Publication date: November 30 th 2020

Credit Market Development And Its Effect On Economic Growth Statistical Analysis For Tanzania

This paper investigates the direction of causality between economic growth and credit market development in Tanzania for the period 2010–2017 using annual data and applying the statistical method under SPSS program. Linear regression and correlation methods were both used to analyse the relationship between dependent variable and independent variables and obtaining necessary coefficients for determining the regression equation. Findings of the study suggest that there is an opposite correlation between the economic growth rate, total credit value in million USD and average exchange rate (when one variable increases, the other decreases). Meanwhile, a positive correlation between inflation and economic growth has been observed, meaning that the inflation rates have contributed positively to economic growth of Tanzania. The study also observed the influence of inflation in economic growth and hence calls for effective control of inflation equation.

The Monetary Transmission Mechanism in Canada: A Time-Varying Vector Autoregression with Stochastic Volatility

This study uses the state-space representation of a time-varying vector autoregression with stochastic volatility (TVP-VAR-SV) to study monetary policy and private sector behaviour in Canada. The main results indicate that both shock variances and autoregressive coefficients of the VAR have evolved systematically over time. The time-varying coefficients of the systematic component of the VAR suggest that monetary policy has become more proactive and less reactive regarding inflation since the early-1990s, which coincides with the adoption of explicit inflation targets. Monetary policy is now able to focus mainly on movements in the output gap to prevent future increases in inflation. The coefficients on the policy rate in both the output gap and inflation equations suggest that the private sector and therefore the transmission mechanism have become more sensitive to monetary policy responses. On the other hand, the coefficients on the output gap in the equations for both inflation and the policy rate have been relatively stable over this period, consistent with view that monetary policy remains more forward-looking regarding inflation than being reactive to inflation surprises as in the past.

Inclusion of Asset Prices: An Argument for Monetary Policy and the Phillips Curve

Abstract This article develops an augmented price index that includes house prices, so that the relationship between inflation and unemployment levels in the traditional Phillips curve can be better represented. This general price index may be considered complementary to the Harmonised Index of Consumer Prices (HICP) and establishes the model-theoretical basis for a new-Keynesian model that derives the conditions for a monetary policy rule in a dynamic stochastic optimization procedure. Based on a simple stochastic differential equation for augmented inflation, we show that the reaction of the central bank depends on the marginal effects on augmented inflation and the output gap of an infinitesimal change in asset prices. This analysis could be interpreted as a way of using asset prices for a general price index, being an adequate method to restore monetary credibility. JEL classifications: E52, E58, G10 Keywords: monetary policy, asset prices, Phillips curve

Vocal Fold Cancer Transoral Laser Microsurgery Following European Laryngological Society Laser Cordectomy Classification

The surgical treatment of glottic, or vocal cord, cancer has seen considerable progression over the past several decades. Specifically, there has been a stark transition from open partial laryngectomy surgery to endoscopic laser microsurgical techniques which have been inspired in large part by two landmark studies: Professor Wolfgang Steiner's original case series describing transoral laser microsurgery for glottic cancer (1993) and the European Laryngological Society's (ELS) classification scheme (2000). We performed a comprehensive review of published literature to characterize the pattern of this novel modality as compared with two landmark studies over the past four decades. An English literature search was conducted on PubMed for available original investigations on surgical treatment of glottic laryngeal cancer published over the past 40 years. Our Boolean criteria included the following terms: cancer, glottic, laryngeal, surgery, endoscopic, and laser. The publication rates were calculated as annual compound growth as well as corrected growth rates as defined by the Fisher equation for inflation effects. Our review identified 13,372 studies covering larynx cancer and 3,557 studies covering glottic cancer original studies. Among these, we analyzed the compound annual growth rates and correct growth rates for three distinct publication periods or epochs, prior to 1993, 1993-1999, and 2000-2017. For all but two of the search term groups covering both glottic cancer as well as larynx cancer, there was a substantial growth improvement in the time period following the ELS classification scheme as compared with the growth rate of the time period following Steiner's case series. The progress toward minimally invasive treatment of glottic cancer has progressed steadily over the past several decades. Analysis of publication show increased growth during the time period following the ELS classification scheme over the time period following Steiner's landmark study. A mistake would be concluding any diminished importance of Professor Steiner's work, instead, our analysis demonstrates the wide-spread adoption of the endoscopic laser cordectomy procedure following the ELS classification system. Complex surgical techniques such as transoral laser microsurgery are optimally disseminated within well-defined classification schemes, though further validation is warranted.

London equation for monodromy inflation

We focus on the massive gauge theory formulation of axion monodromy inflation. We argue that a gauge symmetry hidden in these models is the key protection mechanism from dangerous corrections from both field theory and gravitational dynamics. The effective theory of large field inflation is a dual to a massive U(1) 4-form gauge theory, which is similar to a massive gauge theory description of superconductivity. The gauge theory explicitly realizes the old Julia-Toulouse proposal for a low energy description of a gauge theory in a defect condensate. While we work mostly with the example of quadratic axion potential induced by flux monodromy, we discuss how other types of potentials can arise from inclusion of gauge invariant corrections to the theory.

A Kind of Neither Keynesian Nor Neoclassical Model (3): The Decision of Inflation

The difficulty of inflation theory is to explain the fluctuations of the price level in short-term. First, we use the relationship between price and money in the traditional quantity equation to derive the inflation equation that can explain changes of the price level in the long-term and short-term. Then, by analyzing the phase diagram of the single variable and the complex variable in the inflation equation, we find that the fundamental reason of the periodic change of the short-term price is the periodic change of the real interest rate. Because fluctuations of the inflation rate and interest rate are the same in phase, so there is no difference in the business cycle. Finally, this paper analyzes the rise and fall of core price under the influence of money and real interest rate respectively. It lays the foundation for further discussion of the relationship between inflation and unemployment in Phillips curve.

A Kind of Neither Keynesian Nor Neoclassical Model (4): The Nature of Philips Curve

Officials always want to use the replacement relationship between the unemployment rate and the price of the Phillips curve to reduce the unemployment rate, but things go crisscross. The reason is that there is no causal relationship between price and unemployment. In this paper, it demonstrates the Phillips curve is derived from the unemployment cycle equation and the inflation equation. And then, it discusses the influence of core variables and fluctuating variables on Phillips curve and the cause of distortion or complete disappearance of Phillips curve. Finally, this paper discusses monetary neutrality and related monetary policy issues. The policy that is conducive to the smooth operation of the system is consistent with the constant money supply of the economic cycle, rather than counter-cyclical regulation.

Global slack and open economy Phillips curves – A province-level view from China

The “global slack hypothesis” implies that greater integration of the world economy, i.e. globalisation, should have made inflation more responsive to global than domestic economic slack. Many previous studies have accordingly estimated national inflation equations with measures of global output gaps. We use three and a half decades of subnational data from China's provinces to test the global slack hypothesis. Using tests for non-nested regressions, for many provinces we can reject a Phillips curve with a province-level measure of economic slack against a model with China's national output gap, which is consistent with the hypothesis. We also show that the real exchange rate matters for inflation dynamics in many Chinese provinces, in particular those most open to international trade. In addition to supporting the global slack hypothesis, our results emphasise the importance of cross-border factors for China's inflation developments.

Multivariate Dynamic Co-integration and Causality Analysis between Inflation and its Determinants

This paper investigates the impacts of money supply, government expenditure, velocity, industry value addition and economic growth on inflation of Bangladesh using time series data from 1978-2014. The ADF test results suggest that the variables are of I(1). It is found that there exist five co-integration equations. The outcome of the Granger Causality test suggests the short-run unidirectional causality running from industrial value addition to money supply, from inflation, money supply, velocity, industrial value addition and economic growth to government spending. Bidirectional causality has been found between economic growth and industrial value addition. Finally, short-run and long-run effects of money supply, government spending, velocity, industry value addition and economic growth on inflation are estimated. It is found that the speed of adjustment for short-run to approach to the long-run equilibrium level is significant at any significance level. It has been found that it will take about 1.25 years for a complete convergence process to approach its equilibrium. Therefore, in case of any shock to the inflation equation, the speed of adjustment is significantly faster. It has also been found that the long-run effects of money supply and velocity have positive significant effects while the economic growth has significant negative effect on inflation in Bangladesh economy. It has been found that the long-run effects of money supply and velocity are more than short-run effects meaning that over the time more money supply and velocity increase the more and more inflation in Bangladesh but economic growth decreases the inflation.