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.

Is there a Phillips Curve in the US and the EU15 Countries? An empirical investigation

This paper studies the comovement between output and inflation in the EU15 countries. Following den Haan (2000), I use the correlations of VAR forecast errors at different horizons in order to analyze the output-inflation relationship. The empirical results show that eight countries display a significant positive comovement between output and inflation. Moreover, the empirical evidence suggests that a Phillips curve phenomenom is more likely to be detected in countries where inflation is more stable.

Data Gathering Bias: Trait Vulnerability to Psychotic Symptoms?

Background Jumping to conclusions (JTC) is associated with psychotic disorder and psychotic symptoms. If JTC represents a trait, the rate should be (i) increased in people with elevated levels of psychosis proneness such as individuals diagnosed with borderline personality disorder (BPD), and (ii) show a degree of stability over time. Methods The JTC rate was examined in 3 groups: patients with first episode psychosis (FEP), BPD patients and controls, using the Beads Task. PANSS, SIS-R and CAPE scales were used to assess positive psychotic symptoms. Four WAIS III subtests were used to assess IQ. Results A total of 61 FEP, 26 BPD and 150 controls were evaluated. 29 FEP were revaluated after one year. 44% of FEP (OR = 8.4, 95% CI: 3.9-17.9) displayed a JTC reasoning bias versus 19% of BPD (OR = 2.5, 95% CI: 0.8-7.8) and 9% of controls. JTC was not associated with level of psychotic symptoms or specifically delusionality across the different groups. Differences between FEP and controls were independent of sex, educational level, cannabis use and IQ. After one year, 47.8% of FEP with JTC at baseline again displayed JTC. Conclusions JTC in part reflects trait vulnerability to develop disorders with expression of psychotic symptoms.