Explosive Hyperinflation, Inflation Tax Laffer Curve and Modelling the use of Money

This paper analyzes the existence of an inflation tax Laffer curve (ITLC) in the context of two standard optimizing monetary models: a cash-in-advance model and a money in the utility function model. Agents’ preferences are characterized in the two models by a constant relative risk aversion utility function. Explosive hyperinflation rules out the presence of an ITLC. In the context of a cash-in-advance economy, this paper shows that explosive hyperinflation is feasible and thus an ITLC is ruled out whenever the relative risk aversion parameter is greater than one. In the context of an optimizing model with money in the utility function, this paper firstly shows that an ITLC is ruled out. Moreover, it is shown that explosive hyperinflations are more likely when the transactions role of money is more important. However, hyperinflationary paths are not feasible in this context unless certain restrictions are imposed.

Competitive equilibrium hyperinflation under rational expectations

This paper shows that a competitive equilibrium model, where a representative agent maximizes welfare, expectations are rational and markets are in equilibrium can account for several hyperinflation stylized facts. The theory is built by combining two hypotheses, namely, a fiscal crisis that requires printing money to finance an increasing public deficit and a predicted change in an unsustainable fiscal regime.

The impact of past hyperinflation on current household investment behavior

Neste estudo é proposto que a instabilidade macroeconômica extrema causada pela hiperinflação nas décadas de 80 e 90 no Brasil causou um efeito de longo prazo no comportamento de poupança dos indivíduos. Usando dados da Pesquisa Nacional por Amostra de Domicílio (PNAD) de 2009 e 2011 e um questionário complementar, encontramos três evidências significantes: (1) indivíduos que possuem memória do período de hiperinflação no Brasil tem uma menor probabilidade de participar do mercado de ações; (2) há uma forte evidência que pessoas que estavam em idade formativa durante a hiperinflação são menos dispostos de possuir algum tipo de instrumento financeiro do que pessoas que tiveram a experiência desse choque macroeconômico em outros períodos de suas vidas; (3) mulheres solteiras são muito mais prováveis de ter uma poupança financeira que homens solteiros.

Avoiding some costs of inflation and crawling toward hyperinflation : the case of the Brazilian domestic currency substitute

The pattem of a classical hyperinflation is an acute acceleration of the inflation levei accompanied by rapid substitution away from domestic currency. Brazil, however, has becn experiencing inflation leveis well above 1,000% a year since 1988 without entering the classical hyperinflation path. Two elements play key roles in differcntiating the Brazilian case from other hyperinflationary experiences: indexation and the provision of a reliable domestic currency substitute, Le., the provision of liquidity to interest-bearing assets. This paper claims that the existence of this domestic currency substitute is lhe main source of both lhe inability of the Brazilian central bank to fight inflation and of the unwillingness of Brazilians to face the costs of such a fight. The provision of the domestic currency substitute through the banking sector is modeled, and the main macroeconomic consequences of this monetary regime are derived. Those are: the lack of a nominal anchor for the price system due to the passive monetary policy; the endogeneity of seignorage unlikc traditional models of hyperinflation; and lhe ineffectiveness of very high real interest rates.

Effects of Positive End-expiratory Pressure Titration and Recruitment Maneuver on Lung Inflammation and Hyperinflation in Experimental Acid Aspiration-induced Lung Injury

Background: In acute lung injury positive end-expiratory pressure (PEEP) and recruitment maneuver are proposed to optimize arterial oxygenation. The aim of the study was to evaluate the impact of such a strategy on lung histological inflammation and hyperinflation in pigs with acid aspiration-induced lung injury. Methods: Forty-seven pigs were randomly allocated in seven groups: (1) controls spontaneously breathing; (2) without lung injury, PEEP 5 cm H2O; (3) without lung injury, PEEP titration; (4) without lung injury, PEEP titration + recruitment maneuver; (5) with lung injury, PEEP 5 cm H2O; (6) with lung injury, PEEP titration; and (7) with lung injury, PEEP titration + recruitment maneuver. Acute lung injury was induced by intratracheal instillation of hydrochloric acid. PEEP titration was performed by incremental and decremental PEEP from 5 to 20 cm H2O for optimizing arterial oxygenation. Three recruitment maneuvers (pressure of 40 cm H2O maintained for 20 s) were applied to the assigned groups at each PEEP level. Proportion of lung inflammation, hemorrhage, edema, and alveolar wall disruption were recorded on each histological field. Mean alveolar area was measured in the aerated lung regions. Results: Acid aspiration increased mean alveolar area and produced alveolar wall disruption, lung edema, alveolar hemorrhage, and lung inflammation. PEEP titration significantly improved arterial oxygenation but simultaneously increased lung inflammation in juxta-diaphragmatic lung regions. Recruitment maneuver during PEEP titration did not induce additional increase in lung inflammation and alveolar hyperinflation. Conclusion: In a porcine model of acid aspiration-induced lung injury, PEEP titration aimed at optimizing arterial oxygenation, substantially increased lung inflammation. Recruitment maneuvers further improved arterial oxygenation without additional effects on inflammation and hyperinflation.

Exercise Performance and Dynamic Hyperinflation in Lymphangioleiomyomatosis

Rationale: Lymphangioleiomyomatosis (LAM) is characterized by exercise performance impairment. Although airflow limitation is common, no previous studies have evaluated the prevalence and impact of dynamic hyperinflation (DH) in LAM. Objectives: To investigate the dynamic responses during maximal exercise and the prevalence, predictors, and repercussions of DH in LAM. Methods: Forty-two patients with LAM performed symptom-limited incremental cycle exercise and pulmonary functions tests (PFTs) and were compared with 10 age-matched healthy women. Dyspnea intensity, inspiratory capacity, oxygen saturation, and cardiac, metabolic, and respiratory variables were assessed during exercise. Patients with LAM also performed a 6-minute walk test (6MWT). Measurements and Main Results: Patients with LAM had higher baseline dyspnea, poorer quality of life, obstructive pattern, air trapping, and reduced diffusing capacity of carbon monoxide in PFTs. Although they had the same level of regular physical activity, their maximal exercise performance was reduced and was associated with ventilatory limitation, greater desaturation, and dyspnea. The prevalence of DH was high in LAM (55%), even in patients with mild spirometric abnormalities, and was correlated with airflow obstruction, air trapping, and diffusing capacity of carbon monoxide. Compared with the non-DH subgroup, the patients who developed DH had a ventilatory limitation contributing to exercise cessation on cycling and higher desaturation and dyspnea intensity during the 6MWT. Conclusions: Ventilatory limitation and gas exchange impairment are important causes of exercise limitation in LAM. DH is frequent in LAM, even in patients with mild spirometric abnormalities. DH was associated with the severity of disease, higher dyspnea, and lower oxygen saturation. In the 6MWT, desaturation and dyspnea were greater in patients with DH.

Progression of pulmonary hyperinflation and trapped gas associated with genetic and environmental factors in children with cystic fibrosis

BACKGROUND: Functional deterioration in cystic fibrosis (CF) may be reflected by increasing bronchial obstruction and, as recently shown, by ventilation inhomogeneities. This study investigated which physiological factors (airway obstruction, ventilation inhomogeneities, pulmonary hyperinflation, development of trapped gas) best express the decline in lung function, and what role specific CFTR genotypes and different types of bronchial infection may have upon this process. METHODS: Serial annual lung function tests, performed in 152 children (77 males; 75 females) with CF (age range: 6-18 y) provided data pertaining to functional residual capacity (FRCpleth, FRCMBNW), volume of trapped gas (VTG), effective specific airway resistance (sReff), lung clearance index (LCI), and forced expiratory indices (FVC, FEV1, FEF50). RESULTS: All lung function parameters showed progression with age. Pulmonary hyperinflation (FRCpleth > 2SDS) was already present in 39% of patients at age 6-8 yrs, increasing to 67% at age 18 yrs. The proportion of patients with VTG > 2SDS increased from 15% to 54% during this period. Children with severe pulmonary hyperinflation and trapped gas at age 6-8 yrs showed the most pronounced disease progression over time. Age related tracking of lung function parameters commences early in life, and is significantly influenced by specific CFTR genotypes. The group with chronic P. aeruginosa infection demonstrated most rapid progression in all lung function parameters, whilst those with chronic S. aureus infection had the slowest rate of progression. LCI, measured as an index of ventilation inhomogeneities was the most sensitive discriminator between the 3 types of infection examined (p < 0.0001). CONCLUSION: The relationships between lung function indices, CFTR genotypes and infective organisms observed in this study suggest that measurement of other lung function parameters, in addition to spirometry alone, may provide important information about disease progression in CF.

The effect of positive end-expiratory pressure level on peak expiratory flow during manual hyperinflation

Including positive end-expiratory pressure (PEEP) in the manual resuscitation bag (MRB) may render manual hyperinflation (MHI) ineffective as a secretion maneuver technique in mechanically ventilated patients. In this study we aimed to determine the effect of increased PEEP or decreased compliance on peak expiratory flow rate (PEF) during MHI. A blinded, randomized study was performed on a lung simulator by 10 physiotherapists experienced in MHI and intensive care practice. PEEP levels of 0-15 cm H2O, compliance levels of 0.05 and 0.02 L/cm H2O, and MRB type were randomized. The Mapleson-C MRB generated significantly higher PEF (P < 0.01, d = 2.72) when compared with the Laerdal MRB for all levels of PEEP. In normal compliance (0.05 L/cm H2O) there was a significant decrease in PEF (P < 0.01, d = 1.45) for a PEEP more than 10 cm H2O in the Mapleson-C circuit. The Laerdal MRB at PEEP levels of more than 10 cm H2O did not generate a PEF that is theoretically capable of producing two-phase gas-liquid flow and, consequently, mobilizing pulmonary secretions. If MHI is indicated as a result of mucous plugging, the Mapleson-C MRB may be the most effective method of secretion mobilization.

Exchange rate overvaluation under hyperinflation: The case of Peru

This dissertation examines the behavior of the exchange rate under two different scenarios. The first one is characterized by, relatively, low inflation or a situation where prices adjust sluggishly. The second is a high inflation economy where prices respond very rapidly even to unanticipated shocks. In the first one, following a monetary expansion, the exchange rate overshoots, i.e. the nominal exchange rate depreciates at a faster pace than the price level. Under high levels of inflation, prices change faster than the exchange rate so the exchange rate undershoots its long run equilibrium value.^ The standard work in this area, Dornbusch (1976), explains the overshooting process in the context of perfect capital mobility and sluggish adjustment in the goods market. A monetary expansion will make the exchange rate increase beyond its long run equilibrium value. This dissertation expands on Dornbusch's model and provides an analysis of the exchange rate under conditions of currency substitution and price flexibility, characteristics of the Peruvian economy during the hyper inflation process that took place at the end of the 1980's. The results of the modified Dornbusch model reveal that, given a monetary expansion, the change in the price level will be larger than the change in the exchange rate if prices react more than proportionally to the monetary shock.^ We will expect this over-reaction in circumstances of high inflation when the velocity of money is increasing very rapidly. Increasing velocity of money, gives rise to a higher relative price variability which in turn contributes to the appearance of new financial (and also non-financial) instruments that report a higher return than the exchange rate, causing people to switch their demand for foreign exchange to this new assets. In the context of currency substitution, economic agents hoard and use foreign exchange as a store of value. The big decline in output originated by hyper inflation induces people to sell this hoarded money to finance current expenses, increasing the supply of foreign exchange in the market. Both, the decrease in demand and the increase in supply reduce the price of foreign exchange i.e. the real exchange rate. The findings mentioned above are tested using Peruvian data for the period January 1985-July 1990, the results of the econometric estimation confirm our findings in the theoretical model. ^

The pathophysiology of emphysema : considerations for critical care nursing practice

Emphysema is caused by exposure to cigarette smoking as well as alpha1-antitrypsin deficiency. It has been estimated to cost the National Health Service (NHS) in excess of £800 million per year in related health care costs. The challenges for Critical Care nurses are those associated with dynamic hyperinflation, Auto-PEEP, malnutrition and the weaning from invasive and non-invasive mechanical ventilation. In this paper we consider the impact of the pathophysiology of emphysema, its effects on other body systems as well as the impact acute exacerbations have when patients are admitted to the Intensive Care Unit.

Essays on Vietnam’s Financial Reforms: Foreign Exchange Statistics and Evidence of Long-Run Equilibrium

In this paper, we examine exchange rates in Vietnam’s transitional economy. Evidence of long-run equilibrium are established in most cases through a single co-integrating vector among endogenous variables that determine the real exchange rates. This supports relative PPP in which ECT of the system can be combined linearly into a stationary process, reducing deviation from PPP in the long run. Restricted coefficient vectors ß’ = (1, 1, -1) for real exchange rates of currencies in question are not rejected. This empirics of relative PPP adds to found evidences by many researchers, including Flre et al. (1999), Lee (1999), Johnson (1990), Culver and Papell (1999), Cuddington and Liang (2001). Instead of testing for different time series on a common base currency, we use different base currencies (USD, GBP, JPY and EUR). By doing so we want to know the whether theory may posit significant differences against one currency? We have found consensus, given inevitable technical differences, even with smallerdata sample for EUR. Speeds of convergence to PPP and adjustment are faster compared to results from other researches for developed economies, using both observed and bootstrapped HL measures. Perhaps, a better explanation is the adjustment from hyperinflation period, after which the theory indicates that adjusting process actually accelerates. We observe that deviation appears to have been large in early stages of the reform, mostly overvaluation. Over time, its correction took place leading significant deviations to gradually disappear.

The trasition from fixed to floating exchange rate regimes: the case of Brazil

This dissertation evaluates macroeconomic management in Brazil from 1994 to the present, with particular focus on exchange rate policy. It points out that while Brazil's Real Plan succeeded in halting the hyperinflation that had reached more than 2000 percent in 1993, it also caused significant real appreciation of the exchange rate situation that was only made worse by the extremely high interest rates and ensuing bout of severe financial crises in the intemational arena. By the end of 1998, the accumulation of internai and externai imbalances led the authorities to drop foreign exchange controls and allow the currency to float. In spite of some initial scepticism, the flexible rate regime cum inflation target proved to work well. Inflation was kept under control; the current account position improved significantly, real interest rates fell and GDP growth resumed. Thus, while great challenges still lie ahead, the recent successes bestow some optimism on the well functioning of this exchange rate regime. The Brazilian case suggests that successful transition from one foreign exchange system to another, particularly during financial crisis, does not depend only on one variable be it fiscal or monetary. In reality, it depends on whole set of co-ordinated policies aimed at resuming price stability with as little exchange rate and output volatility as possible.

A descoberta da inflação inercial

Este artigo apresenta a minha versão da história da inflação inercial. A primeira formulação completa dessa teoria está num artigo meu e de Nakano, de 1983; e o primeiro artigo que propôs um choque de preços combinado com uma tabela de conversão é de 1984, também dos mesmos autores. Resende e Arida escreveram em 1984 o primeiro trabalho propondo uma moeda indexada para neutralizar a inércia; Francisco Lopes, também em 1984, relacionou a inflação inercial com hiperinflação. As principais referências estão aqui claramente apresentadas.