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.

Sequential auctions with continuation costs

In actual sequential auctions, 1) bidders typically incur a cost in continuing from one sale to the next, and 2) bidders decide whether or not to continue. To investigate the question "when do bidders drop out," we define a sequential auction model with continuation costs and an endogenously determined number of bidders at each sale, and we characterize the equilibria in this modele Simple examples illustrate the effect of several possible changes to this modele

Portifolio selection with random transaction costs

Transaction costs have a random component in the bid-ask spread. Facing a high bid-ask spread, the consumer has the option to wait for better terms oI' trade, but only by carrying an undesirable portfolio balance. We present the best policy in this case. We pose the control problem and show that the value function is the uni que viscosity solution of the relevant variational inequality. Next, a numerical procedure for the problem is presented.

WeIfare costs of inflation the case for interest-bearing money and empiricaI Estimates for Brazil

We provide in this paper a closed fonn for the Welfare Cost of Inflation which we prove to be closer than Bailey's expression to the correct solution of the corresponding non-separable differential equation. Next, we extend this approach to an economy with interest-bearing money, once again presenting a better appoximation than the one given by Bailey's approach. Finally, empirical estimates for Brazil are presented.

A restatement of the welafare costs of inflation. The wast of scarce resources in the manufacturing , banking and household sectors

Lucas (2000) estimates that the US welfare costs of inflation are around 1% of GDP. This measurement is consistent with a speci…c distorting channel in terms of the Bailey triangle under the demand for monetary base schedule (outside money): the displacement of resources from the production of consumption goods to the household transaction time à la Baumol. Here, we consider also several new types of distortions in the manufacturing and banking industries. Our new evidences show that both banks and firms demand special occupational employments to avoid the inflation tax. We de…ne the concept of ”the foat labor”: The occupational employments that are aflected by the in‡ation rates. More administrative workers are hired relatively to the bluecollar workers for producing consumption goods. This new phenomenon makes the manufacturing industry more roundabout. To take into account this new stylized fact and others, we redo at same time both ”The model 5: A Banking Sector -2” formulated by Lucas (1993) and ”The Competitive Banking System” proposed by Yoshino (1993). This modelling allows us to characterize better the new types of misallocations. We …nd that the maximum value of the resources wasted by the US economy happened in the years 1980-81, after the 2nd oil shock. In these years, we estimate the excess resources that are allocated for every speci…c distorting channel: i) The US commercial banks spent additional resources of around 2% of GDP; ii) For the purpose of the firm foating time were used between 2.4% and 4.1% of GDP); and iii) For the household transaction time were allocated between 3.1% and 4.5 % of GDP. The Bailey triangle under the demand for the monetary base schedule represented around 1% of GDP, which is consistent with Lucas (2000). We estimate that the US total welfare costs of in‡ation were around 10% of GDP in terms of the consumption goods foregone. The big di¤erence between our results and Lucas (2000) are mainly due to the Harberger triangle in the market for loans (inside money) which makes part of the household transaction time, of the …rm ‡oat labor and of the distortion in the banking industry. This triangle arises due to the widening interest rates spread in the presence of a distorting inflation tax and under a fractionally reserve system. The Harberger triangle can represent 80% of the total welfare costs of inflation while the remaining percentage is split almost equally between the Bailey triangle and the resources used for the bank services. Finally, we formulate several theorems in terms of the optimal nonneutral monetary policy so as to compare with the classical monetary theory.

Information asymmetry and transaction costs in a cross-cultural business transaction

The intent of this paper is to provide a practitioners insight into the present and foreseeable future of problem of transaction cost economics related to culture and business etiquette that may increase the of complexity of business communication. We will also explore whether it impacts participant's mindsets regarding opportunistic or passive aggressive behavior. We will study the role of culture, ethics, information asymmetry, and legal systems regarding their importance towards the business contracts and lack of knowledge in local environments. We will make connections to contract theory strategies and objectives and recommend business practices. Furthermore, economic theory explores the role of the impossibility of the perfect contract. Historical and present day operational factors are examined for the determination of forward-looking contract law indications worldwide. This paper is intended provide a practitioners view with a global perspective of a multinational, mid-sized and small corporations giving consideration in a non-partisan and non-nationalistic view, yet examines the individual characteristics of the operational necessities and obligations of any corporation. The study will be general, yet cite specific articles to each argument and give adequate consideration to the intricacies of the global asymmetry of information. This paper defends that corporations of any kind and size should be aware of the risk of international business etiquette and cultural barriers that might jeopardize the savings you could obtain from engaging international suppliers.

Impact of worksite health-promotion programs in hospital admission costs and medical leaves in a sample of brazilian companies

Programas de saúde e bem-estar têm sido adotados por empresas como forma de melhorar a saúde de empregados, e muitos estudos descrevem retornos econômicos positivos sobre os investimentos envolvidos. Entretanto, estudos mais recentes com metodologia melhor têm demonstrado retornos menores. O objetivo deste estudo foi investigar se características de programas de saúde e bem-estar agem como preditores de custos de internação hospitalar (em Reais correntes) e da proporção de funcionários que têm licença médica, entre Abril de 2014 e Maio de 2015, em uma amostra não-aleatória de empresas no Brasil, através de parceria com uma empresa gestora de ‘big data’ para saúde. Um questionário sobre características de programas de saúde no ambiente de trabalho foi respondida por seis grandes empresas brasileiras. Dados retirados destes seis questionários (presença e idade de programa de saúde, suas características – inclusão de atividades de screening, educação sobre saúde, ligação com outros programas da empresa, integração do programa à estrutura da empresa, e ambientes de trabalho voltado para a saúde – e a adoção de incentivos financeiros para aderência de funcionários ao programa), bem como dados individuais de idade, gênero e categoria de plano de saúde de cada empregado , foram usados para construir um banco de dados com mais de 76.000 indivíduos. Através de um modelo de regressão múltipla e seleção ‘stepwise’ de variáveis, a idade do empregado foi positivamente associada e a idade do programa de saúde e a categoria ‘premium’ de plano de saúde do funcionário foram negativamente associadas aos custos de internação hospitalar (como esperado). Inesperadamente, a inclusão de programas de screening e iniciativas de educação de saúde nos programas de saúde e bem-estar nas empresas foram identificados como preditores positivos significativos para custos de admissão hospitalar. Para evitar a inclusão errônea de licenças-maternidade, apenas os dados de licença médica de pacientes do sexo masculino foram analisados (dados disponíveis apenas para duas entre as companhias incluídas, com um total de 18.957 pacientes do sexo masculino). Analisando estes dados através de um teste Z para comparação de proporções, a empresa com programa de saúde que inclui atividades voltadas a cessação de hábitos ruins (como tabagismo e etilismo), controle de diabetes e hipertensão, e que adota incentivos financeiros para a aderência de funcionários ao programa tem menor proporção de empregados com licençca médica no período analisado, quando comparada com a outra empresa que não tem estas características (também conforme esperado). Entretanto, a companhia com menor proporção de funcionários com licença médica também foi aquela que adota programa de screening entre as atividades de seu programa de saúde. Potenciais fontes de ameaça à validade interna e externa destes resultados são discutidas, bem como possíveis explicações para a associação entre programas de screening e educação médica a piores indicadores de saúde nesta amostra de companhias são discutidas. Novos estudos com melhor desenho, com amostras maiores e randômicas são necessários para validar estes resultados e possivelmente melhorar a validade interna e externa destes resultados.

Efetividade da doxiciclina na profilaxia contra letptospirose

Leptospirosis is a worldwide zoonosis of considerable medical and economical importance that affects humans in both urban and rural contexts, as well as domestic animals and wild fauna. Leptospira interrogans is the causative agent and is transmitted to humans by indirect contact with contaminated soil or water. The clinical syndromes include sub clinical infection, self-limited anicteric febrile illness, and severe and potentially fatal illness, known as Weil´s syndrome. In developed countries, leptospirosis is related to occupational or recreational activities while in developing countries, outbreaks occur during floods. In those regions, traditional strategies to prevent the transmission are difficulties to be implemented because of costs and lack of community acceptance. In addition, no efficient vaccine is available for human use. Several studies have suggested that chemoprophylaxis with doxycycline pre and post-exposure may be effective to prevent leptospirosis. Leptospirosis has been reported in rural areas of the State of Rio Grande do Norte, Brazil since 1985 in rice farmers who present the anicteric illness. The disease cause great social and economics impact. The study was conducted in São Miguel where an epidemic of leptospirosis in rice farmers was reported. The main objective was to determine the efficacy of doxycycline in preventing Leptospira exposure. A taxa de soroprevalência de leptospirose na população estudada antes e após a colheita foi de 14,2% (n=22) e de 16.6% (n=27) respectivamente. Anti-Leptospira serology was determined for 61 subjects in two instances, pre and post-exposure to potential contaminated water. There was an increased risk of 29.0 per cent in acquiring infection for individuals that did not use doxycycline. In addition, an increased risk of 30.0 % observed in farmers who did not use protection when exposed to Leptospira. The adhesion to preventive chemoprophylaxis was 55.7%. Therefore doxycycline, under specific circunstances appears to be an effective alternative to protect against leptosprirosis infection. A large sample composed of individuals to adhere to preventive therapy is needed to define time, dosage and length of use of doxycycline in this area

Alternative Intrabladder Manometry Technique for the Indirect Measurement of Intra-abdominal Pressure in Horses

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Comparative biology and production costs of Podisus nigrispinus (Hemiptera: Pentatomidae) when fed different types of prey

Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq)