Period Of Inflation Research Articles

News Media, Inflation, and Sentiment

We study the relationship between media portrayals of inflation and consumer sentiment. Using tools from natural language processing, we uncover two competing narratives in US news coverage of inflation: the first relates inflation to financial variables, while the second relates inflation to real variables. As inflation rose in 2021, media increasingly emphasized the real economy. Linking inflation news to social network data from Twitter, we find that exposure to articles emphasizing the connection between inflation and the real economy significantly reduces sentiment, particularly in periods of high inflation. Shifting media narratives may therefore have contributed to declining consumer sentiment in 2021.

Turning in the landscape: A new mechanism for generating primordial black holes

We propose a new model-independent mechanism for producing primordial black holes from a period of multi-field inflation. This requires an enhancement of primordial fluctuations at short scales compared to their value at CMB scales. We show that such an amplification naturally occurs when the inflationary trajectory exhibits a strong turn, that is a limited period during which the trajectory strongly deviates from a geodesic in field space, and is sufficient for subsequently producing primordial black holes with the abundance to be all or a fraction of dark matter. Our mechanism is generic to models of inflation realized in a multi-dimensional field space with an overlying potential and geometry, also referred to as the inflationary landscape, as arises in embeddings of inflation in high-energy theories. We study analytically and numerically how the duration and the strength of the turn impact the primordial fluctuation power spectrum and the abundance of primordial black holes. Our mechanism has the potential of exhibiting unique features accessible to observation through the primordial black hole spectrum and the stochastic background of gravitational waves, offering a precious glimpse at the dynamics of inflation.

Average inflation targeting when agents are learning

Many central banks consider the change of the approach to the monetary policy. One of the options is average inflation targeting. Under rational expectations this policy leads to a tangible increase in social welfare. In this paper, we demonstrate that in the case of adaptive expectations, on the contrary, it is more likely to lead to a decrease in welfare. In particular, considering the case of adaptive learning, we show that attempts by the central bank to stabilize average inflation lead to unnecessarily high output volatility. Moreover, even if the central bank includes average inflation in its loss function, it still would not optimally alternate periods of low and high inflation. Thus, the implementation of average inflation targeting seems to be inappropriate. We consider the case of the absence of zero lower bound, which allows us to formulate conclusions that are relevant for developing and developed countries which have experienced a prolonged acceleration of inflation in recent years.

A Virtual Economics Laboratory: What Generated High Inflation? 14 Different Explanations to One Inflation Period

<p><big>A high inflation period of seven years (1978-1985) in Israel, which turned into a hyperinflation, puzzled Israeli economists, who tried to understand its causes and mechanisms. As a result, they provided fourteen different explanations. Although all of the explanations were based on the same data, the researchers’ conclusions were either different or contradictory. This situation provides a virtual laboratory for the study of the ways and methods of economic thought; it is a classical Ceteris patribus situation. This laboratory further raises other subjects and questions. Are there principal differences between the economists' explanations? Is it possible to classify these differences? How do economic explanations for inflation differ from non-economic ones? In this article, I classified thirteen economic studies and one non-economic study into five clusters. This was the methodological tool used to inquire into the economic thought in this virtual laboratory.</big></p>

Expected inflation and U.S. stock sector indices: A dynamic time-scale tale from inflationary and deflationary crisis periods

This paper analyses the co-movement between changes in expected inflation and U.S. stock sector returns utilizing a wavelet local multiple correlation approach, which records temporal evolution and potential correlation dynamics at various frequencies. Using daily data from January 2, 2003 to December 30, 2022, we find insignificant correlations in the short term but heterogeneous correlations in longer time periods. After the deflationary GFC period, quantitative easing has turned the long-term correlation negative in some sectors, and since COVID-19, the correlation has been positive. However, energy and materials are pro-inflation sectors in the medium and long term.

The problem of stagflation: How should the European Central Bank respond to the increase in inflation?

Inflation began to increase rapidly all around the world towards the end of 2021, and it remained elevated throughout 2022. Higher energy prices contributed significantly to the increase in inflation. However, core inflation, excluding the direct contribution of energy prices, was also significantly above the European Central Bank’s inflation target, which was partially due to the highly expansionary monetary policy implemented during the pandemic. Drawing on historical evidence, this article discusses how the European Central Bank should respond to the increase in inflation. Higher interest rates are necessary to counteract the Bank’s previous expansionary policy. However, when the economy faces significant headwinds, a monetary policy that is too tight may cause a severe recession. Lessons from earlier periods of inflation suggest that, from a long-term perspective, contractionary monetary policy is preferable despite the short-term pain. To limit the negative consequences, this contractionary policy should be coupled with supply-side reforms aimed at stimulating economic growth and increasing the resilience of the European economy.

On the short-term persistence of mutual fund performance in Europe

In this article, we examine the short-term persistence in mutual fund performance in the main European markets between January 1990 and December 2022. The mutual fund industry in Europe has experienced significant growth in recent years as a consequence of the integration of its markets. However, the European mutual fund industry is still an unexplored area of research with only a small number of significant studies compared to the US industry. Using a sample of daily survivorship bias-free data on the five most important European mutual fund countries, which includes 2734 mutual funds across all countries, we find statistically significant persistence in the post-ranking quarter across different performance models for all countries. This evidence is present across all deciles including the top-decile and bottom-decile mutual funds. Further, we also extend our analysis to high inflation periods.

Constraints on the scalar-field potential in warm inflation

We quantify the degree of fine-tuning required to achieve an observationally viable period of inflation in the strongly dissipative regime of warm inflation. The ``fine-tuning'' parameter $\ensuremath{\lambda}$ is taken to be the ratio of the change in the height of the potential $\mathrm{\ensuremath{\Delta}}V$ to the change in the scalar field $(\mathrm{\ensuremath{\Delta}}\ensuremath{\phi}{)}^{4}$, i.e., the width of the potential, and therefore measures the requisite degree of flatness in the potential. The best motivated warm inflationary scenarios involve a dissipation rate of the kind $\mathrm{\ensuremath{\Gamma}}\ensuremath{\propto}{T}^{c}$ with $c\ensuremath{\ge}0$, and for all such cases, the bounds on $\ensuremath{\lambda}$ are tighter than those for standard cold inflation by at least 3 orders of magnitude. In other words, these models require an even flatter potential than standard inflation. On the other hand for the case of warm inflation with $c<0$, we find that in a strongly dissipative regime the bound on $\ensuremath{\lambda}$ can significantly weaken with respect to cold inflation. Thus, if a warm inflation model can be constructed in a strongly dissipative, negatively temperature-dependent regime, it accommodates steeper potentials otherwise ruled out in standard inflation.

N search of the ideal husband. Could inequality in the pre-industrial era be measured through dowries? North-eastern Catalonia, 1750-1825

This paper explores the possibilities that dowries may offer to study inequality in the pre-industrial era. We argue that, mostly, in rural societies with impartible inheritance, families competed to join the heir of an estate that would allow them to maintain or even improve their socio-economic status by means of paying the best possible dowry. Hence, dowries may be an indicator of family wealth and, therefore, disparities in dowry amounts could be informing about economic inequality. Then, we show the results of a case study based on a rural region in north-eastern Catalonia from 1750 to 1825, which suggest that over the last decades of the 18th century and the first quarter of the 19th century, inequality increased significantly. As it was a period of bellicosity and inflation, our results suggest that political instability tended to increase inequality in pre-industrial societies, as it has been previously stated by some authors.

Adverse Outcome of Two-Staged Breast Reconstruction: More Than One Culprit

BackgroundTwo-stage prosthetic breast reconstruction with initial insertion of a tissue expander followed by change-over to an implant after a period of inflation has become a well-established option in breast reconstruction. Our aim was to analyze the feasibility of two-stage breast reconstruction in our center by following the surgical technique, number of complications and associated risk factors. Patients and methodsWe studied 91 patients who underwent skin sparring mastectomy and tissue expander placement in our surgical unit, between January 2017 and December 2021. Axillary surgery was performed in all patients. We collected data on age, smoker status, breast size, comorbidities, tumor characteristics, neoadjuvant treatment and surgical intervention details. ResultsSkin necrosis (12.08%) and seroma (16.48%) were the most common complications. 7.69% of the patients required reintervention. Patients underwent delayed reconstruction after more than 6 months in 69.7% of the cases, while the overall reconstruction rate was 86.08%. Smoker status, an increased body mass index, comorbidities, neoadjuvant treatment, type of incision and location of the implant were the main factors that led to adverse outcomes. ConclusionsTissue expanders are a viable option for reconstruction; however, we observed a higher incidence of skin complications in smokers and in cases where periareolar incision was used.

Will allowed returns for regulated utilities keep up with inflation?

Over the course of 2022, and continuing into this year, the Federal Reserve has raised interest rates rapidly in the face of inflation not seen since the 1970s. Inflation is affecting utility finances, putting upward pressure on labor costs and investment costs for new plant. It is also increasing the cost of capital, a key parameter regulators use in establishing utility rates. In this article, we examine the tools in the regulatory toolkit that are typically used to assure that the approved utility rates are reflective of the utility’s cost. We highlight several mechanisms that have been used in past periods of high inflation to ensure that rates continue to be cost-reflective, even as cost pressures mount. We conclude by noting that the mechanisms, while appropriate in today’s high inflation environment, should also be flexible enough to allow for rates to reflect lower inflation levels when inflation does subside.

Observational constraints on warm natural inflation

Warm natural inflation is studied for the case of the original cosine potential. The radiation bath during inflation induces a dissipation (friction) rate in the equation of motion for the inflaton field, which can potentially reduce the field excursion needed for an observationally viable period of inflation. We examine if the dissipation thus provides a mechanism to avoid the large decay constant f ≳ M pl of cold cosine natural inflation. Whereas temperature independent dissipation has previously been shown to alleviate the need for a trans-Planckian decay constant f, we illustrate here the difficulties of accommodating a significantly sub-Planckian decay constant (f < 10-1 M pl) for the case of a temperature dependent dissipation rate in the form Γ ∝ Tc , with c = {1,3}. Such dissipation rates represent physically well-motivated constructions in the literature. For each model, we map its location in the r-ns plane and compare with cosmic microwave background (CMB) data. For c = 1 (c = 3), we find that agreement with CMB data requires that dissipation be in the weak (moderate) regime and that the minimum allowed value of the decay constant in the potential is f min = 0.3 (0.8) M pl, respectively.

MeV dark matter with MeV dark photons in Abelian kinetic mixing theories

We consider the cosmology and phenomenology of a dark photon portal to a simple dark sector consisting of a single, light, fermionic dark matter particle species with mass in the MeV range. We entertain three possible kinetic mixing structures of a new Abelian gauge group U(1)dark with the visible sector through U(1)e.m., U(1)Y and T[SU(2)_L]. We assume the dark photon to be massive and around the MeV scale, thus close to the mass scale of the dark matter candidate. We compute the dark matter relic density via freeze-out and freeze-in, entertaining the additional possibility of a late inflationary period that could dilute the dark matter yield of heavy candidates, and (ii) additional production modes, for models with under-abundant thermal production. We explore the parameter space compatible with a variety of experimental and astrophysical bounds, and discuss prospects for discovery with new CMB probes and MeV gamma-ray telescopes.

Observational Imprints of Enhanced Scalar Power on Small Scales in Ultra Slow Roll Inflation and Associated Non-Gaussianities

The discovery of gravitational waves from merging binary black holes has generated considerable interest in examining whether these black holes could have a primordial origin. If a significant number of black holes have to be produced in the early universe, the primordial scalar power spectrum should have an enhanced amplitude on small scales, when compared to the COBE normalized values on the large scales that is strongly constrained by the anisotropies in the cosmic microwave background. In the inflationary scenario driven by a single, canonical scalar field, such power spectra can be achieved in models that permit a brief period of ultra slow roll inflation during which the first slow roll parameter decreases exponentially. In this review, we shall consider a handful of such inflationary models as well as a reconstructed scenario and examine the extent of formation of primordial black holes and the generation of secondary gravitational waves in these cases. We shall also discuss the strength and shape of the scalar bispectrum and the associated non-Gaussianity parameter that arise in such situations. We shall conclude with an outlook wherein we discuss the wider implications of the increased strengths of the non-Gaussianities on smaller scales.

Inflation uncertainty, macroeconomic instability and the efficiency of financial institutions

PurposeThe study examines the effect of macroeconomic risk, inflation uncertainty and instability associated with key macroeconomic indicators on the efficiency of financial institutions among economies in sub-Saharan Africa (SSA).Design/methodology/approachData for the empirical inquiry were compiled from 35 SSA economies from 1996 to 2019. The empirical estimates were carried out using pooled ordinary least squares (POLS) with Driscoll and Kraay’s (1998) standard errors.FindingsReported empirical estimates show that macroeconomic risk and exchange rate volatility constrain the efficiency of financial institutions. Further results suggest that inflation uncertainty has a significant influence on the efficiency of financial institutions among economies in the subregion. Additionally, reviewed empirical estimates show that institutional quality positively moderates the nexus between inflation uncertainty and financial institution efficiency. At the same time, political instability is found to worsen the adverse effect of macroeconomic risk on the efficiency of financial institutions.Practical implicationsFor policymakers and governments, improved institutional structures are recommended to ensure the operational efficiency of financial institutions, especially during an inflationary period. For decision-makers among financial institutions, the study recommends policies that have the potential to make their institutions less vulnerable to macroeconomic risk and exchange rate fluctuations.Originality/valueThe approach adopted in this study differs significantly from related studies in that the study examines and reviews interactions and relationships not readily found in the reviewed literature.

Social and political opposition to energy pricing reforms

ABSTRACT Fossil fuel subsidy reforms (FFSRs) are critical to sustainable development goals. Fuel subsidies sap governments of funds and contribute to environmental degradation. However, progress on their reduction has been mixed due to weak political and social support for higher prices. Energy affordability has recently shot up the agenda, following a period of sustained energy and broader price inflation, contributing to a resurgence of strikes and other expressions of social grievance. Drawing on empirical experiences across a diverse set of countries – including Chile, France, Indonesia, Iran and Ghana – this paper explores factors shaping the societal and political acceptability of FFSRs. It shows that such measures should be better adapted to the unique political, social and economic fabric of each reforming country or locality. It builds on insights from a small literature on political and social factors shaping FFSR outcome, which emphasize greater risks of social resistance in countries with weak institutions, lower income levels and a history of political instability. It finds that a key element for the success of policy reforms in this area is the ability of policy makers to maintain a broader balance among social, political and industrial interests, regardless of the stage of economic and institutional development.

La efectividad de los distintos tipos de activos como cobertura frente a la inflación

Rationale The current period of high inflation makes it difficult for investors to maintain their profitability targets in real terms. Against this background, it is important to analyse the returns on different types of assets recorded in this and past inflationary episodes. Takeaways •In the past, both commodities and inflation-linked bonds have generated positive real returns during inflationary periods, while conventional sovereign bonds and general stock market indices have yielded negative real returns. •In the current inflationary episode energy-related assets have generated the highest returns, while in the United States residential real estate has also performed well. •In the recent period, both in the euro area and the United States investors have increased their holdings in investment funds specialising in inflation-linked bonds, and have reduced their holdings in conventional bond and equity funds.

ПОТЕНЦИАЛ НАЛОГООБЛОЖЕНИЯ ПРИБЫЛИ ДЛЯ СТАБИЛИЗАЦИИ ФИНАНСОВОГО СОСТОЯНИЯ ОРГАНИЗАЦИИ В ПЕРИОД ИНФЛЯЦИОННЫХ ВСПЛЕСКОВ

The authors give tax methods that can be used during the inflation periods, given that taxes are one of the financial policy tools used to achieve economic stability, where the income tax is controlled to achieve economic goals, and in this study the inflationary adjustment coefficient is designed to calculate, In addition, introduce into tax legislation the concept of estimated income tax as a hypothetical amount of financial result, which could receive an economic entity during financial and economic activities under normal planned conditions, in the absence of emergency factors brought by decisions of state authorities.

Compensation [MicroBusiness

We are in a period of high inflation. The cost of almost everything has increased as economies respond to the easing of the pandemic after two-plus years. Salaries are increasing, too, partially in response to increasing costs, but more significantly, in response to labor shortages and the Great Resignation. Those increasing salaries are one of the drivers of inflation.

Profitability of company x under inflation – case study

Aim of the work: The aim of the work is to present the impact of management profitability in company X on its business continuity in conditions of high inflation. Main research hypothesis: The price of fuels on the market played a special role in managing profitability under inflation conditions in company X. Methodology: The research material is based on the economic categories: profitability and inflation, subject literature and other sources (the author, by analyzing the economic categories: profitability and inflation, tried to discover their impact on the business continuity of company X). The studies used, among others, the Du Pont model, the Quick Test method, the E. Altman method and the β-business paradigm method of Z. Mietlewski. Research results: Return on sales (ROS) ratios in company X in the analyzed period was lower than the inflation rate, and the return on assets (ROA) ratio was higher than the inflation rate, as was the return on equity (ROE) ratio. All of these indicators at company X were significantly above the average in the transport and logistics sector. High inflation was not severe for company X, because the company compensated the increase in fuel purchase prices in this period by raising the rates for transport services, and thanks to the repayment of their loan, it did not experience an increase in interest rates. Hence, e.g. during this period, the company was characterized by high profitability compared to the competition. In 2022, the year of high inflation, the company started to generate profit earlier than in the period of low inflation in 2019-2020. The profitability management model adopted by the company focused on regulating the sale prices of transport services depending on fuel prices and on reducing the costs of external services in the company’s activities. Company X was not at risk of bankruptcy during the period under study and its equity had little impact on its business continuity. A major risk for company X is having only one large contractor in its portfolio, which determines the company’s profitability.