Period Of Inflation Research Articles

Cross-Country Analysis of Inflation Experiences and Homeownership: A Qualitative Review

This qualitative literature review examines the relationship between inflation experiences and homeownership across countries. Drawing on a synthesis of existing research, the review explores how historical inflation contexts influence individuals' decisions to invest in real estate. Findings indicate that periods of high inflation often motivate individuals to view homeownership as a hedge against inflationary pressures, particularly in economies with volatile economic conditions. Institutional factors, such as mortgage market structures and housing policies, play a crucial role in shaping this relationship, influencing overall homeownership rates across different regions. Immigrant populations bring unique perspectives, as their housing decisions in host countries are influenced by inflation experiences in their countries of origin. The review highlights methodological diversity and calls for more longitudinal and cross-country studies to enhance the robustness and generalizability of findings. Addressing these dynamics can provide insights into effective policy interventions aimed at promoting sustainable housing markets globally.

Can higher federal funds rates control mortgage lending during periods of high inflation and high house prices?

The U.S. is facing higher inflation since December 2020 along with higher house prices. After a sharp increase, house prices have started to decline very recently even more drastically – reminding us of the global financial crisis 2007–08. Rather late, from December 2021 onwards, the Fed started to increase the Fed funds rate. However, it is unclear whether the Fed funds rate can control bank lending activities – especially, mortgage lending. Surprisingly, our results suggest that the Fed funds rate fails to control mortgage lending during high inflation and high house prices in the absence of bank reserve requirements.

Hedging Using Digital Currencies Against Inflation Risks In Light Of The Globalization Of Economic Activity: A Theoretical Study

This theoretical study explores the potential of digital currencies as a hedging tool against inflation risks in the context of globalized economic activity. With the increasing interconnectedness of economies and the volatility of traditional currencies, investors and businesses are seeking alternative ways to protect their wealth from the eroding effects of inflation. Digital currencies, with their unique characteristics such as decentralization and limited supply, have emerged as a potential solution. This research investigates the theoretical underpinnings of using digital currencies for inflation hedging, analyzing their correlation with traditional assets and their performance during periods of high inflation. By examining the factors influencing the effectiveness of digital currencies as a hedge, this study aims to provide insights for investors and policymakers seeking to navigate the complexities of the global economic landscape. Keywords: digital currencies, inflation hedging, globalization, economic activity, theoretical study

Comparative Analysis of Gold, Art, and Wheat as Inflation Hedges

This study confirms gold’s role as a reliable inflation hedge while introducing new insights into lesser-explored assets like art and wheat. Using advanced methodologies such as the ARDL framework and LSTM deep learning, it conducts a detailed analysis of inflation-hedging dynamics, exploring non-linear relationships and unexpected inflation impacts across various asset classes. The findings reveal complex dynamics. Gold demonstrates strong long-term inflation hedging potential. The negative coefficient for the US dollar index suggests that gold acts as a hedge against currency depreciation. Furthermore, a positive relationship between gold returns and inflation during high inflation periods highlights its effectiveness in protecting purchasing power. Art presents a more intricate picture. Long-term analysis suggests a weak mean-reverting tendency, but a negative relationship with inflation, potentially linked to economic downturns. Interestingly, unexpected inflation positively correlates with art returns in the long run, hinting at its potential inflation-hedging abilities. No statistically significant connection between wheat prices and overall inflation was observed; the short-run analysis reveals a dynamic interplay between inflation, real GDP growth, and wheat prices at different time points.

ESG scores and stock returns during COVID-19: an empirical analysis of an emerging market

PurposeThe COVID-19 pandemic resulted in a dramatic downturn in the global stock markets. Investors look for safe stocks that can provide better risk-adjusted returns. Stocks with higher Environmental, Social, and Governance (ESG) scores can be good choices for investors. This study focuses on this argument by examining the relationship between ESG indicators and stock returns while considering financial and macroeconomic variables.Design/methodology/approachIn this study, 39 non-financial firms listed in Nifty-50, for which data is available, have been included. Panel data from 2018 to 2021 is collected to examine this relationship in the presence of COVID-19. Additionally, the panel regression method is used.FindingsThe empirical findings indicate a positive relationship between ESG scores and stock returns. This relationship holds even when the control variables like Return on Assets (ROA), Gross Domestic Product (GDP), Return on Equity (ROE), age, size, leverage of the firm, inflation, and crisis period are used in the model.Originality/valueThis study contributes by examining the linkage between ESG indicators and stock return while controlling the impact of the financial and macroeconomic variables in Indian markets, which has not been undertaken so far. Moreover, this is the first study to use the ESG score data of S&P Global, which gives more weight to the material factors of a firm.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-10-2023-0819.

Drivers of inflationary shocks and spillovers between Europe and the United States

This paper builds a structural econometric model to measure the impact on inflation of three shocks: a shock of disequilibrium in the energy markets, a money growth shock, and a global stochastic shock, which covers factors such as inflationary expectations and uncertainty. It is found that for the economies of Europe and the United States, the current inflationary period is dominated by the global component closely followed by energy markets in the short term and by monetary growth in the medium term. The dynamics of the model further show that the recent exponential inflationary surge of 2021 onward is mainly headed by other factors rather than energy markets or money growth, such as expectations or uncertainty. Further analysis of the spillover effects between the inflation of Europe and the United States based on endogeneity-robust econometric estimations shows that this relationship is unidirectional from the USA to Europe. In essence, this work shows that a coordinated strategy between fiscal and monetary policies is the best response to recent inflationary shocks.

Large curvature fluctuations from no-scale supergravity with a spectator field

We investigate the large curvature perturbations which can lead to the formation of primordial black holes (PBHs) in the context of no-scale supergravity. Our study does not depend on any exotic scenario, such as scalar potentials with inflection points or bulks, and aims to avoid the fine-tuning of model parameters to achieve the formation of PBHs. This formation relies on the quantum fluctuations of a light spectator stochastic field after the inflationary period. Our analysis is based on the SU(2,1)/SU(2)×U(1) symmetry, considering both the inflaton and the spectator field. Specifically, we examine existing no-scale models with Starobinsky-like scalar potentials that are consistent with observable constraints on inflation from measurements of the cosmic microwave background (CMB). These models involve two chiral fields: the inflaton and the modulus field. We propose a novel role for the modulus field as a spectator field, responsible for generating PBHs. Our hypothesis suggests that while the inflaton field satisfies the CMB constraints of inflation, it is the modulus field acting as the spectator that leads to large curvature perturbations, capable to explain the production of PBHs. Additionally, we prioritize retaining the inflationary constraints from the CMB through the consideration of spectator fluctuations. Therefore, by exploring the relationship between these fields within the framework of the SU(2,1)/SU(2)×U(1) symmetry, our aim is to unveil their implications for the formation of PBHs.

Cosmic Strings from Thermal Inflation

Thermal inflation was proposed as a mechanism to dilute the density of cosmological moduli. Thermal inflation is driven by a complex scalar field possessing a large vacuum expectation value and a very flat potential, called a “flaton”. Such a model admits cosmic string solutions, and a network of such strings will inevitably form in the symmetry breaking phase transition at the end of the period of thermal inflation. We discuss the differences of these strings compared to the strings which form in the Abelian Higgs model. Specifically, we find that the upper bound on the symmetry breaking scale is parametrically lower than in the case of Abelian Higgs strings, and that the lower cutoff on the string loop distribution is determined by cusp annihilation rather than by gravitational radiation (for the value of the transition temperature proposed in the original work on thermal inflation).

Thermal curvature perturbations in thermal inflation

We compute the power spectrum of super-horizon curvature perturbations generated during a late period of thermal inflation, taking into account fluctuation-dissipation effects resulting from the scalar flaton field's interactions with the ambient radiation bath. We find that, at the onset of thermal inflation, the flaton field may reach an equilibrium with the radiation bath even for relatively small coupling constants, maintaining a spectrum of thermal fluctuations until the critical temperature T c, below which thermal effects stop holding the field at the false potential minimum. This enhances the field variance compared to purely quantum fluctuations, therefore increasing the average energy density during thermal inflation and damping the induced curvature perturbations. In particular, we find that this inhibits the later formation of primordial black holes, at least on scales that leave the horizon for T > T c. The larger thermal field variance also reduces the duration of a period of fast-roll inflation below T c, as the field rolls to the true potential minimum, which should also affect the generation of (large) curvature perturbations on even smaller scales.

Trends in prices of checkpoint inhibitors in the US, 2016-2023.

11075 Background: Checkpoint inhibitors have revolutionized the treatment of several cancers since the first Food and Drug Administration (FDA) approval in 2014. Yet the cost of these drugs remains high, with implications for patient access and healthcare sustainability. We assessed pricing trends for drugs targeting program death-ligand 1 (PD-L1) or programmed cell death protein 1 (PD-1) from 2016-2023. Methods: This study included 6 PD-L1 or PD-1 inhibitors approved through 2019. Quarterly Medicare Part B spending limits, which are based on the average sales prices of drugs from manufacturers to wholesalers or direct purchasers, were collected from public files. To directly compare drugs, prices were converted to prices per month (28 days), based on the FDA-labeled dosage and frequency for metastatic non-small cell lung cancer (NSCLC), a common cancer for which each drug was approved. Prices were adjusted to 2023 dollars using the consumer price index for all urban consumers. Results: In 2016, monthly prices for pembrolizumab ($15,604) and nivolumab ($15,814) were similar. Prices for these 2 drugs and avelumab, approved in 2017, remained within 5% of each other throughout the study period. Three other drugs (cemiplimab, atezolizumab, and durvalumab) were approved from 2016-2018 and had prices 3%-20% lower than the other 3 drugs (Table). Inflation-adjusted prices for all drugs remained stable from 2016-2019 and decreased from 2020-2023, corresponding with a period of higher inflation. In 2023, monthly prices for the 6 drugs ranged from $11,961 (durvalumab) to $15,043 (pembrolizumab). From 2016-2023, inflation-adjusted prices decreased, by an average of 0.7% (pembrolizumab) to 4.8% (cemiplimab) per year. Conclusions: Although the FDA approved 6 mechanistically similar PD-1 or PD-L1 inhibitors from 2014-2018, prices remained generally unchanged during those years and through 2023, with slight declines in real prices attributable to post-COVID consumer inflation. Competition among these brand-name cancer drugs did not meaningfully affect prices. Regulators should investigate why price competition has not emerged, and policymakers should grant more opportunities to negotiate lower prices for patients and the health care system, as is being rolled out this year in Medicare following passage of the Inflation Reduction Act. [Table: see text]

The Effects of Energy Commodities on CPI

From 2021-2023, the US saw a period of unparalleled inflation. Prompted by the debate on the role of energy prices, this paper investigates the role of rising energy commodities in this inflationary trend. Focusing on the Consumer Price Index (CPI-U), we explore the direct and indirect effects of energy commodity price changes. Despite the sector's 3-5% CPI weight, energy commodities exhibit significant volatility, contributing to 30% of monthly inflation fluctuations on average. The study identifies Gasoline and Fuel oil, both crude oil derivatives, as key components. Additionally, we assess the secondary pass-through effects, mainly through the transportation and industrial sectors. This research provides insights into the substantial impact of energy commodities on inflation and encourages further exploration on this topic, which can enhance economic forecasts and possibly monetary policy forecasts.

Volatility transmission in the property market during two inflationary periods: The 2008–2009 global financial crisis and the COVID-19 crisis

This research paper investigates the changes in correlation patterns of volatility between the UK and US property markets and other global markets during periods of inflation. We use the global financial crisis (GFC) and the COVID-19 crisis as proxies for two inflationary periods. Our data set consists of the period between April 11, 2007, to April 4, 2022. We apply a bivariate Dynamic Conditional Correlation (DCC) and a Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model to explain the time-varying correlation between UK and US property markets and other global property markets. According to our analysis, there is a sizable time-varying link between the real estate markets in our sample. Additionally, we discover that the GFC and COVID-19 exhibit different relationships with UK and US real estate market indices.

Radical pluralism, high inflation, and trust in historical context: the continued relevance of Fox in understanding UK public sector strikes

PurposeThe paper uses key themes from Fox’s writing to reflect on the wave of public sector industrial action that developed in the UK since the early 2020s: specifically the relevance of (1) radical pluralism, (2) historical context, (3) understanding the effects of high inflation and (4) (a breakdown of) trust relations.Design/methodology/approachThe paper draws primarily on evidence from broad public debate but is informed by discussions held with senior union leaders both for a research project and in delivering development training.FindingsRadical pluralism is used as a lens through which to understand declining trust in institutions of pluralist collective industrial relations in the UK public sector, arguing that current developments need to be understood in historical context. An analysis of the industrial action in the early 2020s highlights the ways that a period of high inflation can stress institutions of collective employment regulation, rendering visible the limits of conventional, pluralist industrial relations.Research limitations/implicationsThe paper could be extended by more detailed empirical data collection, both in the UK and other national institutional contexts.Practical implicationsUnions need to more consistently focus on issues of power. A stronger focus on power might identify the limitations of pluralist institutions of collective regulation and embed a commitment to building union influence to challenge those existing structures in favour of mechanisms to build workers' power more broadly.Social implicationsUnderstanding these disputes as, at least in part, being about the limits to and undermining of trust in collective institutions that regulate work and employment allows us to better understand the forces at play and potential outcomes of these disputes.Originality/valueThe paper makes three key contributions: first, applying Fox’s work in a practical way to contemporary UK industrial relations; second, extending his analyses to public sector industrial relations and third, arguing that power needs to be more centrally located within union objectives in order to reshape industrial relations to radical pluralist ends.

Cosmological complexity of the modified dispersion relation

Complexity will be more and more essential in high-energy physics. It is naturally extended into the very early universe. Considering the universe as a quantum chaotic system, the curvature perturbation of the scalar field is identified with the two-mode squeezed state. By solving the Schrödinger equation, one can obtain the numerical solutions of the angle parameter and squeezing parameter. The solution of the squeezing parameter mainly determines the evolution of complexity. Our numeric indicates that the complexity of the modified dispersion relation will have a non-linear pattern after the horizon exits. Meanwhile, its corresponding Lyapunov index is also larger compared with the standard case. During the inflationary period, the complexity will irregularly oscillate and its scrambling time is also shorter compared with the standard case. Since the modified dispersion relation can be dubbed as the consequences of various frameworks of quantum gravity, it could be applicable to these frameworks. Finally, one can expect the framework of quantum gravity will lead to the fruitful evolution of complexity, which guides us in distinguishing various inflationary models.

The Impact of Inflation on Institutional Investors' Behaviour in the Indian Stock Market

Inflation has a significant impact on equity markets as it can lead to a reduction in purchasing power and a reduction in real income, which in turn affects the cost of equity. While inflation generally has a negative impact on equity markets, it can have a positive effect in some cases. Investors in the Indian stock market can react to inflation by adapting their investment strategies, including changes in asset allocation, sector rotation, risk management, monitoring central banks ‘activities and adjusting their investment horizon. Institutional Investors (IIs), such as pension funds, insurance companies and mutual funds, may adjust their investment strategies in order to include more inflation-linked assets, such as Treasury Inflation-Protected Securities (TIPS) or inflation-indexed bonds, in order to preserve their purchasing power. In addition, their portfolios can be reallocated to assets less susceptible to the negative effects of inflation, such as equities, gold and real estate. Institutional Investors can also move their investments to sectors that tend to perform well during inflationary periods, such as consumer staples, utilities and natural resources. In addition, risk management strategies, such as diversification, hedging, or investment in inflation-protected securities, may be used to protect portfolios from inflation-induced volatility. Finally, Institutional Investors closely monitor the central bank's activities, such as interest rates of the Reserve Bank of India (RBI) and monetary policy adjustments, which may affect inflationary expectations and market sentiment. This study aims to analyse the impact of inflation on Institutional Investors’(IIs) investment behaviour in the Indian stock market.

Predicting the short and long term effects of food price inflation, armed conflicts, and climate variability on global acute malnutrition in Somalia

BackgroundMalnutrition poses a substantial challenge in Somalia, impacting approximately 1.8 million children. This critical issue is exacerbated by a multifaceted interplay of factors. Consequently, this study seeks to examine the long-term and short-term effects of armed conflicts, food price inflation, and climate variability on global acute malnutrition in Somalia.MethodsThe study utilized secondary data spanning from January 2015 to December 2022, sourced from relevant databases. Two distinct analytical approaches were employed to comprehensively investigate the dynamics of global acute malnutrition in Somalia. Firstly, dynamic autoregressive distributed lag (ARDL) simulations were applied, allowing for a nuanced understanding of the short and long-term effects of armed conflicts, food price inflation, and climate variability on malnutrition. Additionally, the study employed kernel-based regularized least squares, a sophisticated statistical technique, to further enhance the robustness of the findings. The analysis was conducted using STATA version 17.ResultsIn the short run, armed conflicts and food price inflation exhibit positive associations with global acute malnutrition, particularly in conflict-prone areas and during inflationary periods. Moreover, climatic variables, specifically temperature and rainfall, demonstrate positive associations. It is important to note that temperature lacks a statistically significant relationship with global acute malnutrition in the short run. In the long run, armed conflicts and food price inflation maintain persistent impacts on global acute malnutrition, as confirmed by the dynamic ARDL simulations model. Furthermore, both temperature and rainfall continue to show positive associations with global acute malnutrition, but it is worth noting that temperature still exhibits a non-significant relationship. The results from kernel-based regularized least squares were consistent, further enhancing the robustness of the findings.ConclusionsIncreased armed conflicts, food price inflation, temperature, and rainfall were associated with increased global acute malnutrition. Strategies such as stabilizing conflict-prone regions, diplomatic interventions, and peace-building initiatives are crucial, along with measures to control food price inflation. Implementing climate adaptation strategies is vital to counter temperature changes and fluctuating rainfall patterns, emphasizing the need for resilience-building. Policymakers and humanitarian organizations can leverage these insights to design targeted interventions, focusing on conflict resolution, food security, and climate resilience to enhance Somalia's overall nutritional well-being.

Tail connectedness between category-specific policy uncertainty, sovereign debt risk, and stock volatility during a high inflation period

Greece has experienced high inflation, increased fiscal deficit and debt in recent years, and whether the Greek sovereign debt crisis will resurrect has triggered widespread discussion. This study explores the tail connectedness between category-specific economic policy uncertainty (EPUs), sovereign debt risk (SR), and stock volatility in Greece using a connectedness method based on the quantile VAR model. The findings show that (i) The total connectedness index (TCI) features a U-shaped structure that varies with the conditional quantiles of variables, demonstrating that the spillover effect under extreme conditions for variables is greater than under normal conditions; (ii) Under different market conditions, we observe an apparent heterogeneity in the magnitude of category-specific EPUs' effects on the SR; (iii) The Russia-Ukraine war and the COVID-19 pandemic both have a bigger effect on the TCI than other periods; (iv) SR has shifted from being a net spillover receiver in the median and left tail to a net spillover transmitter in the right tail.

Panel Data Analysis in Identifying and Mapping Caused Factors of Financial Crises and Monetary Instability in Developing Countries

This study aims to reveal the extent of macroeconomic instability, which has the characteristics of a financial crisis and inflation. To test the hypothesis, researchers use fixed effects and random effects estimators to assess the presence of individual and temporal effects. Macroeconomic fundamentals, especially the risk of devaluation and a drop in economic activity can be seen as early warning signs of banks becoming less solvent. They also play a big role in explaining how deposits changed during the crisis. Our findings highlight the unique features of the convertible monetary regime, reinforcing the belief that debtors will enjoy permanent protection against devaluation risks. This perception encourages the dollarization of bank portfolios, thereby increasing the financial system's solvency risks. There is also evidence that the regulatory framework in this area is weak when it comes to the financial system's exposure to devaluation risks and public debt risks. This is especially true when it comes to an institutional framework that makes it hard for government funding to be changed into other currencies. We find that inflation is a very persistent process during periods of high inflation. However, with the decline in inflation after the implementation of the convertibility regime, its persistence reduced significantly. The results show that non-rational persistence is currently not very high, suggesting that the costs of designing the economy should not be either. We find that univariate models tend to perform better over very short horizons. The results suggest that there may be advantages to using a combination of different models, provided they are informative about the relationship between inflation and its short- and long-run determinants.

Monetary Policy Strategies to Foster Price Stability and a Strong Labor Market

I assess monetary policy strategies to foster price stability and labor market strength. The assessment incorporates a range of challenges, including uncertainty regarding the equilibrium real interest rate, mismeasurement of economic potential, and balancing the costs and benefits associated with employment shortfalls and labor market strength. I find that the ELB remains a significant constraint, hindering achievement of the inflation objective and worsening employment shortfalls. Symmetric policy reaction functions mitigate the most adverse effects of employment shortfalls by contributing to economic stability. Make-up strategies address ELB risks. These strategies call for policy to accommodate some period of inflation above its long-run objective following an ELB episode. I also consider an asymmetric shortfalls approach to policy. This approach provides accommodation in response to weak activity while foregoing tightening in response to strong activity. While the approach can, in principle, address ELB risks by raising inflation, it performs poorly. The shortfalls approach exacerbates economic volatility, worsens employment shortfalls, and creates excess inflationary pressures. Mismeasurement is not sufficient to limit the importance of strong responses to measured slack. Overall, monetary policy can promote price stability and labor market strength by focusing on economic stability, with a strategy targeted to address ELB risks.

Space-time entropy, space of singularities and gravity origin: A case study

A new definition of entropy is introduced using a model that simulates an expanding space-time compatible with the fundamental principle of cosmology. The entropy is obtained by mean of a state function that measures the variation of the space-time normal curvature, from a highly compressed space to a lower compressed space. The defined entropy leads to work out a new understanding of the earliest conditions that last for a period estimated to 380,000 years after the Big Bang. It leads to understand via a short period of inflation the process that generates the uniform distribution of matter and energy at the surface of the last scattering. It involves gravitational singularities in a process of gradual decompression propitious to the incubation of matter recombination, and it allows to trace back gravity origin.