Inflation targeting and macroeconomic stability in a Post Keynesian economy

This paper examines the compatibility of inflation targeting with an economy that is Post Keynesian in character. We show that in a Post Keynesian environment, policymakers can both set and achieve an inflation target without adverse consequences for the real economy, as long as an appropriate policy mix is chosen. The latitude that policymakers have in making this choice is investigated. One of our key results is that orthodox policy regimes do not provide appropriate policy mixes. Indeed, the more orthodox the policy regime becomes, the less viable is inflation targeting in a Post Keynesian economy.

Inflation Targeting Matters: Evidence from OECD Economies` Sacrifice Ratios

Using data from OECD economies, we show that inflation targeters suffered smaller output losses during disinflations when compared to nontargeters. We also study why some countries choose to inflation target while others do not and find that higher average inflation and smaller debt levels render the adoption of the regime more likely. Applying Heckman`s procedure to control for selection bias does not alter the link between inflation targeting and less costly disinflations.

Who chooses to inflation target?

In this article, we seek what are the factors behind a country`s decision to move to Inflation Targeting. We find that high past inflation, low debt levels and the absence of a nominal exchange rate anchor increase the probability that a country will end up opting for it. (C) 2007 Elsevier B.V. All rights reserved.

Inflation targeting in emerging economies: What do the data say?

In a recent thought-provoking paper, Ball and Sheridan [Ball, L., Sheridan, N., 2005. Does inflation targeting matter? In: Bernanke, B.S., Woodford, M. (Eds.), The Inflation-Targeting Debate, University of Chicago Press] show that the available evidence for a group of developed economies does not lend credence to the belief that adopting an inflation targeting regime (IT) was instrumental in bringing inflation and inflation volatility down. Here, we extend Ball and Sheridan`s analysis for a subset of 36 emerging market economies and find that, for them, the story is quite different. Compared to non-targeters, developing countries adopting the IT regime not only experienced greater drops in inflation, but also in growth volatility, thus corroborating the view that the regime`s ""constrained flexibility"" to deal with adverse shocks delivered concrete welfare gains. (c) 2006 Elsevier B.V. All rights reserved.

CMB and LSS constraints on a single-field model of inflation

A new inflationary scenario whose exponential potential V (Phi) has a quadratic dependence on the field Phi in addition to the standard linear term is confronted with the five-year observations of the Wilkinson-Microwave Anisotropy Probe and the Sloan Digital Sky Survey data. The number of e-folds (N), the ratio of tensor-to-scalar perturbations (r), the spectral scalar index of the primordial power spectrum (n(s)) and its running (dn(s)/d ln k) depend on the dimensionless parameter a multiplying the quadratic term in the potential. In the limit a. 0 all the results of the exponential potential are fully recovered. For values of alpha not equal 0, we find that the model predictions are in good agreement with the current observations of the Cosmic Microwave Background (CMB) anisotropies and Large-Scale Structure (LSS) in the Universe. Copyright (C) EPLA, 2008.

Sustentabilidade financeira e econômica do gasto público em saúde no nível municipal: reflexões a partir de dados de municípios mato-grossenses

O financiamento do SUS é regido pelo modelo de federalismo fiscal, pelas regras de partilha do Orçamento da Seguridade Social (OSS), por normas do Ministério da Saúde, e pela Emenda Constitucional nº. 29 (EC-29), que vincula à saúde recursos dos entes federados brasileiros. Discute-se aqui a sustentabilidade do gasto público com saúde no nível municipal. Foram estudados 21 municípios, utilizando-se dados dos balanços municipais. De 1996 a 2006 as receitas correntes gerais per capita subiram 280% acima da inflação acumulada e do Produto Interno Bruto (PIB) nacional, variando conforme o porte do município, o qual também definiu a composição dos orçamentos municipais. Já o orçamento que conforma a base da EC-29 elevou-se bem menos (178%), impondo limitações ao incremento da contrapartida municipal em saúde. Acredita-se que o observado nesses municípios se reproduza em milhares de municípios brasileiros e comprometa a capacidade de investimento municipal em saúde, principalmente a partir de 2008. A situação ainda pode se agravar tendo em vista a extinção da Contribuição Provisória sobre a Movimentação ou Transmissão de Valores e de Créditos e Direitos de Natureza Financeira (CPMF), a tramitação dos Projetos de Lei nº. 306/08 e nº. 233/08, e a recessão mundial, a partir da crise do sistema financeiro norte-americano.

Origin of primordial magnetic fields

Magnetic fields of intensities similar to those in our galaxy are also observed in high redshift galaxies, where a mean field dynamo would not have had time to produce them. Therefore, a primordial origin is indicated. It has been suggested that magnetic fields were created at various primordial eras: during inflation, the electroweak phase transition, the quark-hadron phase transition (QHPT), during the formation of the first objects, and during reionization. We suggest here that the large-scale fields similar to mu G, observed in galaxies at both high and low redshifts by Faraday rotation measurements (FRMs), have their origin in the electromagnetic fluctuations that naturally occurred in the dense hot plasma that existed just after the QHPT. We evolve the predicted fields to the present time. The size of the region containing a coherent magnetic field increased due to the fusion of smaller regions. Magnetic fields (MFs) similar to 10 mu G over a comoving similar to 1 pc region are predicted at redshift z similar to 10. These fields are orders of magnitude greater than those predicted in previous scenarios for creating primordial magnetic fields. Line-of-sight average MFs similar to 10(-2) mu G, valid for FRMs, are obtained over a 1 Mpc comoving region at the redshift z similar to 10. In the collapse to a galaxy (comoving size similar to 30 kpc) at z similar to 10, the fields are amplified to similar to 10 mu G. This indicates that the MFs created immediately after the QHPT (10(-4) s), predicted by the fluctuation-dissipation theorem, could be the origin of the similar to mu G fields observed by FRMs in galaxies at both high and low redshifts. Our predicted MFs are shown to be consistent with present observations. We discuss the possibility that the predicted MFs could cause non-negligible deflections of ultrahigh energy cosmic rays and help create the observed isotropic distribution of their incoming directions. We also discuss the importance of the volume average magnetic field predicted by our model in producing the first stars and in reionizing the Universe.

Large change in the predicted number of small halos due to a small amplitude oscillating inflaton potential

A smooth inflaton potential is generally assumed when calculating the primordial power spectrum, implicitly assuming that a very small oscillation in the inflaton potential creates a negligible change in the predicted halo mass function. We show that this is not true. We find that a small oscillating perturbation in the inflaton potential in the slow-roll regime can alter significantly the predicted number of small halos. A class of models derived from supergravity theories gives rise to inflaton potentials with a large number of steps and many trans-Planckian effects may generate oscillations in the primordial power spectrum. The potentials we study are the simple quadratic (chaotic inflation) potential with superimposed small oscillations for small field values. Without leaving the slow-roll regime, we find that for a wide choice of parameters, the predicted number of halos change appreciably. For the oscillations beginning in the 10(7)-10(8) M(circle dot) range, for example, we find that only a 5% change in the amplitude of the chaotic potential causes a 50% suppression of the number of halos for masses between 10(7)-10(8) M(circle dot) and an increase in the number of halos for masses <10(6) M(circle dot) by factors similar to 15-50. We suggest that this might be a solution to the problem of the lack of observed dwarf galaxies in the range 10(7)-10(8) M(circle dot). This might also be a solution to the reionization problem where a very large number of Population III stars in low mass halos are required.

Duality linking standard and tachyon scalar field cosmologies

In this work we investigate the duality linking standard and tachyon scalar field homogeneous and isotropic cosmologies in N + 1 dimensions. We determine the transformation between standard and tachyon scalar fields and between their associated potentials, corresponding to the same background evolution. We show that, in general, the duality is broken at a perturbative level, when deviations from a homogeneous and isotropic background are taken into account. However, we find that for slow-rolling fields the duality is still preserved at a linear level. We illustrate our results with specific examples of cosmological relevance, where the correspondence between scalar and tachyon scalar field models can be calculated explicitly.

Anisotropic singularities in modified gravity models

We show that the common singularities present in generic modified gravity models governed by actions of the type S = integral d(4)x root-gf(R, phi, X). with X = -1/2 g(ab)partial derivative(a)phi partial derivative(b)phi, are essentially the same anisotropic instabilities associated to the hypersurface F(phi) = 0 in the case of a nonminimal coupling of the type F(phi)R, enlightening the physical origin of such singularities that typically arise in rather complex and cumbersome inhomogeneous perturbation analyses. We show, moreover, that such anisotropic instabilities typically give rise to dynamically unavoidable singularities, precluding completely the possibility of having physically viable models for which the hypersurface partial derivative f/partial derivative R = 0 is attained. Some examples are explicitly discussed.

The economic determinants of the Brazilian nominal term structure of interest rates

The purpose of this study is to identify the effects of monetary policy and macroeconomic shocks on the dynamics of the Brazilian term structure of interest rates. We estimate a near-VAR model under the identification scheme proposed by Christiano et al. (1996, 1999). The results resemble those of the US economy: monetary policy shocks that flatten the term structure of interest rates. We find that monetary policy shocks in Brazil explain a significantly larger share of the dynamics of the term structure than in the USA. Finally, we analyse the importance of standard macroeconomic variables (e. g. GDP, inflation and measure of country risk) to the dynamics of the term structure in Brazil.

Price dispersion and price indexes

The traditional theory of price index numbers is based on the law of one price. But in the real world, we frequently observe the existence of an equilibrium price dispersion instead of one price of equilibrium. This article discusses the effects of price dispersion on two price indexes: the cost of living index and the consumer price index. With price dispersion and consumer searching for the lowest price, these indexes cannot be interpreted as deterministic indicators, but as stochastic indicators, and they can be biased if price dispersion is not taken into account. A measure for the bias of the consumer price index is proposed and the article ends with an estimation of the bias based on data obtained from the consumer price index calculated for the city of Sao Paulo, Brazil, from January 1988 through December 2004. The period analysed is very interesting, because it exhibits different inflationary environments: high levels and high volatility of the rates of inflation with great price dispersion until July 1994 and low and relatively stable rates of inflation with prices less dispersed after August 1994.

Nominal versus indexed debt: A quantitative horse race

The main arguments in favor and against nominal and indexed debts are the incentive to default through inflation versus hedging against unforeseen shocks. We model and calibrate these arguments to assess their quantitative importance. We use a dynamic equilibrium model with tax distortion, government outlays uncertainty, and contingent-debt service. Our framework also recognizes that contingent debt can be associated with incentive problems and lack of commitment. Thus, the benefits of unexpected inflation are tempered by higher interest rates. We obtain that costs from inflation more than offset the benefits from reducing tax distortions. We further discuss sustainability of nominal debt in developing (volatile) countries. (C) 2010 Elsevier Ltd. All rights reserved.

The food business environment and the role of China and Brazil building a ""food bridge""

Purpose - The purpose of this paper is to discuss the economic crisis of 2008/2009 and the major impacts on developing nations and food-producing countries Within this macro-environment of food chains, there is concern that food inflation might come back sooner than expected The role of China as one of the major food consumers in the future, and Brazil, as the major food producer, is described as the food bridge, and an agenda of common development of these countries suggested. Design/methodology/approach - This paper reviews literature on muses of food inflation, production shortages, and investigation of programs to solve the problem in the future, it is also based on author`s personal insights and experience of working on this field in the last 15 years, and recent discussions in forums and interviews Findings - The major factors that jointly caused food prices increase in 2007/2008 were population growth, Income distribution, urbanization, dollar devaluations, commodity funds, social programs, production shortages, and bionic`s A list of ten policies is suggested. horizontal expansion of food production, vertical expansion, reduction in transaction costs, in protectionism and other taxes, investment in logistics, technology and better coordination, contracts, new generation of fertilizers and to use the best sources of biofuels. Originality/value - Two major outputs from this paper are the ""food demand model"" that inserts in one model the trends and muses of food inflation and the solutions, and the ""food bridge concept"" that also aligns in one box the imminent major food chain cooperation between China and Brazil

Prolonged recruitment manoeuvre improves lung function with less ultrastructural damage in experimental mild acute lung injury

The effects of prolonged recruitment manoeuvre (PRM) were compared with sustained inflation (SI) in paraquat-induced mild acute lung injury (ALI) in rats. Twenty-four hours after ALI induction, rats were anesthetized and mechanically ventilated with VT = 6 ml/kg and positive end-expiratory pressure (PEEP) = 5 cmH(2)O for 1 h. SI was performed with an instantaneous pressure increase of 40 cmH(2)O that was sustained for 40 s, while PRM was done by a step-wise increase in positive inspiratory pressure (PIP) of 15-20-25 cmH(2)O above a PEEP of 15 cm H(2)O (maximal PIP = 40 cmH(2)O), with interposed periods of PIP = 10 cmH(2)O above a PEEP = 15 cmH(2)O. Lung static elastance and the amount of alveolar collapse were more reduced with PRM than SI, yielding improved oxygenation. Additionally, tumour necrosis factor-alpha, interleukin-6, interferon-gamma, and type III procollagen mRNA expressions in lung tissue and lung epithelial cell apoptosis decreased more in PRM. In conclusion, PRM improved lung function, with less damage to alveolar epithelium, resulting in reduced pulmonary injury. (C) 2009 Elsevier BLV. All rights reserved.