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.

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.

Welfare cost of inflation considering adoption decisions and interest-bearing deposits

Attanasio et al. (JPE, 2002) have used microeconomic data on households to provide new estimates of the welfare costs of infiation using Bailey's unidimensional welfare measure as a basis for their calculations. Such a measure does not properly take into consideration lhe fact that the majority of households in their sample (58.7 percent) holds not only bank deposits and currency, but also a second type of interest-bearing assct. This work devises alternative formulas which account for the existence of bank deposits and a sccond interest-bearing asset in the economy, as well as for adoption decisions regarding alternative financiai technologies.

The structure and optical dispersion of the refractive index of tellurite glass

Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES)

Power-law distributions for the citation index of scientific publications and scientists

The number of citations of a scientific publication or of an individual scientist has become an important factor of quality assessment in science. We report a study of the statistical distribution of the citation index of both scientific publications and scientists. We give numerical evidence that Tsallis (power law) statistics explains the entire distribution over eight orders of magnitude (10-4 to 10(4)). Also, we draw Zipf plots in order to analyze the statistical distribution of the citation index of Brazilian and international physicists and chemists. The relatively small group of Brazilian scientists seems more adequate to explain the dynamics of the citation index. In this case, we find that the distribution of the citation index can also be explained by a gradually truncated power law with similar parameters. We finally discuss possible mechanisms behind the citation index of scientists and scientific publications.

Effects of isoflurane on Tei-index of myocardial performance in healthy dogs

Recently, the Tei-index, a noninvasive index that combines systolic and diastolic time intervals, has been proposed to assess global cardiac performance. However, the effects of isoflurane on the Tei-index have not been characterized. This study aimed at studying the effects of 1.0 minimal alveolar concentration isoflurane anesthesia on the pre-ejection period (PEP), left ventricular ejection time (LVET), PEP/LVET ratio, isovolumic relaxation time (IVRT), stroke index (SI), cardiac index (CI), heart rate (HR), and the Tei-index in healthy unpremedicated dogs. We observed significant increases in PEP, PEP/LVET ratio, IVRT, and TEI, whose maximal increases obtained throughout the study were 47%, 48%, 78%, and 56%, respectively. The LVET and HR did not change significantly, whereas the SI and CI decreased during anesthesia (29% and 26%, respectively). In conclusion, isoflurane produced direct effects on the Tei-index. The changes in systolic and diastolic parameters were supportive of this finding and were consistent with an overall impairment of left ventricular function during anesthesia.

Evaluation of Vmax as an index of myocardial contractility during afterload and preload elevations

In order to test if the maximal velocity of shortening (V(max)TP) reflects the level of inotropism and is affected by preload and afterload, the behavior of this index was compared in two groups of anesthetized, atropinized dogs when preload and afterload were raised with an angiotensin II infusion. In seven dogs (group I), the arterial pressure elevation was allowed to inhibit reflectively the sympathetic tone and depress contractility. In eleven dogs (group II), the adrenergic activity was abolished by previous administration of reserpine. In group I, there was a significant decrease in V(max)TP during the angiotensin infusion. In group II, there was no significant change in the value of this index when the drug was infused. In six animals of this group, a further increase of arterial pressure was induced, but the values of V(max)TP remained similar to control. These results suggest that this index reflects the inotropic state of the myocardium and does not suffer significantly from the influence of preload and afterload elevations within our experimental limits.