Inertial inflation, indexation and price stickiness: evidence from Brazil

This paper evaluates the inertial inflation hypothesis for Brazil. The hypothesis posits that indexation created a feedback mechanism such that one-time supply shocks were fully transmitted into permanent changes in inflation. A theoretical model is used to show that this outcome is based on the assumption of perfect price flexibility. However, with price stickiness indexation does not produce inertial inflation. The degree of inertia is then compared for two periods: one without indexation (1945–1963), and one with indexation (1969–1985). Finally, vector-autoregressive representations are estimated for the latter period, allowing for price stickiness. The empirical results do not support the hypothesis.     

重症患者CT增强检查的护理分析

目的探讨在重症患者CT增强检查过程中加强护理干预的效果。方法选取2013年1月至2014年1月我院行CT增强检查的128例重症患者的临床资料进行归纳整理,分析检查过程中患者的不良反应发生情况及CT增强检查结果。结果除1例患者因气喘、憋闷,未能完成增强检查外,127例患者均顺利完成增强检查。结论在重症患者CT增强检查的过程中加强护理干预,可有效预防意外事故的发生,保证检查顺利进行。     

Degrees of tax indexation and nominal interest rates: Effects of inflation on incentives to save and invest

This paper examines the effects of inflation expectations on nominal interest rates, and incentives to save and invest under partial and complete tax indexation schemes. One would expect that a partially indexed structure would be better than a non-indexed system. However, this is not the case—it reduces the adverse effects of inflation on the incentives to save, but accentuates them on the incentives to invest. Moreover, a change from a non-indexed tax structure to a fully-indexed structure will, ceteris paribus, lead to lower equilibrium interest rates, whereas a switch to a partially indexed system will imply higher rates.

Return enhancement trading strategies for size based portfolios

Recent theoretical work suggests that definitions of market efficiency that allow for the possibility of time-varying risk-premia will generally lead to return sign predictability. Consistent with this theory, we show that a logit model based on the lagged value of the market risk premium is useful for successfully predicting the return sign for CRSP small decile portfolio returns, but not large ones. We additionally employ this model in market timing simulations of micro-cap mutual funds in which investment can actually be made. The results indicate that a market-timing strategy based on our return-sign forecasting model outperforms a buy-and-hold strategy for 13 of 14 micro-cap funds studied. On average, the buy-and-hold strategy produces an average compound return of 11.98% per annum versus an average of 16.60% for the market-timing strategy. Nevertheless, trading restrictions make the return-sign forecasting model more practical to employ by the micro-cap fund portfolio manager rather than the individual fund investor.

Keeping up or Falling behind? The Impact of Benefit and Tax Uprating on Incomes and Poverty*

Each year, the government decides how much to raise benefits and tax allowances. In the UK, the basis for these upratings is rarely debated, yet has major long‐term consequences for the relative living standards of different groups as well as for the public finances. This paper considers the medium‐term implications of present uprating policies, which vary across parameters of the tax–benefit system. Continuing these policies for 20 years, other things staying the same, would result in a near doubling of the child poverty rate alongside a substantial gain to the public finances. At the same time, pensioners are largely protected by the earnings indexation of pensioner benefits including, in time, the basic state pension. We show how difficult it will be to meet the UK child poverty targets unless the greater inequality inherent in the current regime for uprating payments and allowances is redressed.     

On Indexed Bonds and Aggregate Demand Elasticity

Bonds indexed to the price level or inflation have become popular and more common in the industrialized world. This paper examines the impact of indexed bonds on the price level elasticity of aggregate demand. With a model of aggregate demand based on the standard IS-LM framework and expanded to differentiate between bonds which are indexed to the price level and bonds which are not so indexed, we find that the existence of indexed bonds decreases the elasticity of aggregate demand with respect to the general price level.

Scheduling spatially distributed jobs with degradation: Application to pothole repair

This paper considers scheduling spatially distributed jobs with degradation. A mixed integer programming (MIP) model is developed for the linear degradation case in which no new jobs arrive. Properties of the model are analyzed, following which three heuristics are developed, enhanced greedy, chronological decomposition and simulated annealing. Numerical tests are conducted to: (i) establish limits of the exact MIP solution, (ii) identify the best heuristic based on an analysis of performance on small problem instances for which exact solutions are known, (iii) solve large problem instances and obtain lower bounds to establish solution quality, and (iv) study the effect of three key model parameters. Findings from our computational experiments indicate that: (i) exact solutions are limited to instances with less than 14 jobs; (ii) the enhanced greedy heuristic followed by the application of the simulated annealing heuristic yields high quality solutions for large problem instances in reasonable computation time; and (iii) the factors “degradation rate” and “work hours” have a significant effect on the objective function. To demonstrate applicability of the model, a case study is presented based on a pothole repair scenario from Buffalo, New York, USA. Findings from the case study indicate that scheduling spatially dispersed jobs with degradation such as potholes requires: (i) careful consideration of the number of servers assigned, degradation rate and depot location; (ii) appropriate modeling of continuously arriving jobs; and (iii) appropriate incorporation of equity consideration.     

How High is the Private Gain from Wage Indexation?

The effects of firm‐specific shocks on the gain from writing state‐contingent wage contracts are examine in an extension of the model in Gottfries (1992) . It is shown that the introduction of firm‐specific uncertainty increases the gain from indexation to prices only moderately. Moreover, nominal wage contracts should be more prevalent when unemployment benefits are high or unemployment spells are short.     

Market Valuation,Pension Fund Policy and Contribution Volatility

Summary Market valuation is becoming more and more popular, both in accounting and regulation, as well as in academic circles. For pension funds and their participants, the knowledge that market-valued pension liabilities can indeed be transferred to a third party, if necessary, is a great virtue. Using a simulation model, this paper demonstrates the implicit costs and benefits of using market valuation for a typical Dutch pension fund, which offers a guaranteed average pay nominal pension with conditional indexation. The impact turns out to be fairly small, if fixed discount rates are still used for conditional rights. However, if market valuation is used for both unconditional and conditional rights, contribution volatility increases significantly. A remedy is to increase the duration of assets considerably. It is not clear, though, whether this option is available for large pension funds given the limited supply of long-term bonds. This paper benefited from discussions at seminars at DNB, PVK, ABP and CPB. We are grateful to Jan-Marc Berk, Dirk Broeders, and Peter van Els for useful suggestions and comments on a previous version of the paper. Views expressed are those of the authors and do not necessarily reflect official positions of De Nederlandsche Bank.     

Financial innovation and European housing and mortgage markets

In this paper we assess the recent history of house prices andof mortgage lending across Europe. We develop a simple economicframework to estimate the likely contributions of fundamentalfactors, such as changes in real incomes and population growth,to house price appreciation. We also try to quantify how muchof price rises might have been driven by rising expectationsof future capital gains. We estimate that this might have playeda significant role in several countries, including Spain, Sweden,Belgium, and the UK. We then consider what different types ofmortgage arrangement might become attractive in a world of higherhouse prices, analysing types of indexed mortgage that haveadvantages where prices are higher relative to incomes and wherehouse prices may be volatile and cannot be assumed to carryon rising.