# Browsing by Subject "Inflation"

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Item Aspects of inflationary cosmology(2016-05) Lorshbough, Dustin Eldon; Paban, Sonia; Distler, Jacques; Fischler, Willy; Kaplunovsky, Vadim; Pavlovic, NatasaShow more We discuss aspects of excited initial states in inflationary cosmology. We review the basic framework of inflationary cosmology and how to compute observable correlation functions. The framework of excited initial states is introduced and the corrections to the cosmological parameters are computed. We show that if the observable modes in the cosmic microwave background are excited, the amplitude of excitation is strongly bounded. We discuss equation of state parameter transitions as a physical mechanism for generating excited initial states. We describe how to interpret the bounds on excitation amplitude as bounds on the parameters of the transition.Show more Item Essays in asset pricing and portfolio choice(2009-05-15) Illeditsch, Philipp KarlShow more In the ?rst essay, I decompose in?ation risk into (i) a part that is correlated with real returns on the market portfolio and factors that determine investor?s preferences and investment opportunities and (ii) a residual part. I show that only the ?rst part earns a risk premium. All nominal Treasury bonds, including the nominal money-market account, are equally exposed to the residual part except in?ation-protected Treasury bonds, which provide a means to hedge it. Every investor should put 100% of his wealth in the market portfolio and in?ation-protected Treasury bonds and hold a zero-investment portfolio of nominal Treasury bonds and the nominal money market account. In the second essay, I solve the dynamic asset allocation problem of ?nite lived, constant relative risk averse investors who face in?ation risk and can invest in cash, nominal bonds, equity, and in?ation-protected bonds when the investment opportunityset is determined by the expected in?ation rate. I estimate the model with nominal bond, in?ation, and stock market data and show that if expected in?ation increases, then investors should substitute in?ation-protected bonds for stocks and they should borrow cash to buy long-term nominal bonds. In the lastessay, I discuss how heterogeneity in preferences among investors withexternal non-addictive habit forming preferences a?ects the equilibrium nominal term structure of interest rates in a pure continuous time exchange economy and complete securities markets. Aggregate real consumption growth and in?ation are exogenously speci?ed and contain stochastic components thata?ect their means andvolatilities. There are two classes of investors who have external habit forming preferences and di?erent localcurvatures oftheir utility functions. The e?ects of time varying risk aversion and di?erent in?ation regimes on the nominal short rate and the nominal market price of risk are explored, and simple formulas for nominal bonds, real bonds, and in?ation risk premia that can be numerically evaluated using Monte Carlo simulation techniques are provided.Show more Item Essays on monetary economics and central banking(2011-08) Ikizler, Devrim; Stinchcombe, Maxwell; Corbae, Dean; Wiseman, Thomas E.; Kuruscu, Burhanettin; Almazan, AndresShow more In the first chapter, I analyze the US banking industry in order to explain two facts. First, larger banks have lower but less volatile returns on loans compared to smaller banks over the years. Second, larger borrowers have better financial records, i.e. verifiable "hard" information, and they are more likely to match with larger banks, as documented by Berger et al.(2005). I show that these two facts can be explained using a segmented loan markets model with loan contracts between banks and borrowers. Moreover, I show that the difference between the banks returns is not due to diversification advantage of larger banks. Instead, it is because of the fact that larger banks can operate in both large and small loan markets, whereas small banks can only operate in small loans market. Therefore large banks are able to match with larger and less risky borrowers more frequently, which are less likely to default. Moreover, I take the model to infinite horizon allowing bank size to be endogenous to answer multiple policy questions about the future of small business finance and consolidation. I use the data set from the Consolidated Reports of Condition and Income provided by FDIC for 1984-2010 to motivate our research question and to estimate the model. My second chapter revisits the welfare cost of anticipated inflation in an incomplete markets environment where agents can substitute time for money by increasing their shopping frequency. Shopping activity provides an insurance channel to individuals against changes in the return on nominal balances through inflation as documented by Aguiar and Hurst (2007) and McKenzie and Schargrodsky (2011). In my model economy, a higher level of inflation affects people through two channels. First, it distorts the portfolio decision between real and nominal balances, second it redistributes wealth from those who hold more money to those who hold less. People, on average, respond to a higher level of inflation by increasing their price search activity, as they relative return on nominal balances goes down. I find that a 5 percent increase in inflation causes the welfare level go down by 2 percent if people are allowed to substitute time for money, and by 10 percent if we take this channel away from the model. Finally, in the third chapter, I compare the indirect measure of inflation expectations derived by Ireland (1996b) to the direct measures obtained from expectations surveys in multiple countries. Our results show that the inflation bounds calculated for US and UK data are more volatile than survey results, and are too narrow to contain them due to low standard errors in consumption growth series stemming from high persistence. For Chilean and Turkish cases, however, computed bound for inflation expectations seems to fit the survey results better. Out of three different surveys on inflation expectations in Turkey compared with the bounds computed using Turkish data, expectations obtained by the Consumer Tendency Survey fall within these bounds throughout the whole sample period. The success in the Turkish and Chilean cases can be attributed to the fact that volatility in the consumption series, whereas the failure in US and UK cases are most probably stemming from the fact that the current theoretical model is missing a risk-premium component.Show more Item Hints of Universality from Inflection Point Inflation(2013-07-25) Downes, Sean DonovanShow more This work aims to understand how cosmic inflation embeds into larger models of particle physics and string theory. Our work operates within a weakened version of the Landscape paradigm, wherein it is assumed that the set of possible Lagrangians is vast enough to admit the notion of a generic model. By focusing on slow-roll inflation, we examine the roles of both the scalar potential and the space of couplings which determine its precise form. In particular, we focus on the structural properties of the scalar potential, and find a surprising result: inflection point inflation emerges as an important ?and under certain assumptions, dominant ? possibility in the context of generic scalar potentials. We begin by a systematic coarse graining over the set of possible inflection point inflation models using V.I. Arnold?s ADE classification of singularities. Similar to du Val?s pioneering work on surface singularities, these determine structural classes for inflection point inflation which depened on a distinct number of control parameters. We consider both single and multifield inflation, and show how the various structural classes embed within each other. We also show how such control parameters influence the larger physical models in to which inflation is embedded. These techniques are then applied to both MSSM inflation and KKLT-type models of string cosmology. In the former case, we find that the scale of inflation can be entirely encoded within the super- potential of supersymmetric quantum field theories. We show how this relieves the fine-tuning required in such models by upwards of twelve orders of magnitude. Moreover, unnatural tuning between SUSY breaking and SUSY preserving sectors is eliminated without the explicit need for any hidden sector dynamics. In the later case, we discuss how structural stability vastly generalizes ? and addresses ? the Kallosh-Linde problem. Implications for the spectrum of SUSY breaking soft terms are then discussed, with an emphasis on how they may assist in constraining the inflationary scalar potential. We then pivot to a general discussion of the FLRW-scalar phase space, and show how inflection points induce caustics ? or dynamical fixed points ? amongst the space of possible trajectories. These fixed points are then used to argue that for uninformative priors on the space of couplings, the likelihood of inflection point inflation scales with the inverse cube of the number of e-foldings. We point out the geometric origin for the known ambiguity in the Liouville measure, and demonstrate of inflection point inflation ameliorates this problem. Finally we investigate the effect of the fixed point structure on the spectrum of density perturbations. We show how an anomaly in the Cosmic Mircowave Background data ? low power at large scales ? can be explained as a by product of the fixed point dynamics.Show more Item Inflation : connecting theory to observation(2012-08) Meyers, Joel Ray, 1983-; Weinberg, Steven, 1933-; Distler, Jacques; Fischler, Willy; Komatsu, Eiichiro; Paban, SoniaShow more The inflationary paradigm has become widely accepted as an accurate framework in which to describe the physics of the early universe, due both to the conceptual advantages of the idea and the agreement of its predictions with observational data. However, it remains to be determined which of the many detailed theories of inflation correctly describe the universe in which we live. Any such theory faces the challenge of making accurate predictions which agree with observation while also fitting consistently into a theory of high energy physics. Within this challenge there exists the great opportunity to constrain speculative models of fundamental physics. Inflation thereby provides an observational window into theories conventionally thought to be unreachable by experiment. Measurements of anisotropies in the cosmic microwave background radiation and the distribution of large scale structure have proved to be invaluable tools to probe inflation. There has been recent interest in examining the deviations from gaussianity in the statistics of the observed fluctuations. These higher order statistics, if conclusively discovered, stand to teach us a great deal about inflation. Forthcoming data including improved measurements of the cosmic microwave background temperature and polarization will provide additional means to investigate the inflationary era. It is important to understand precisely what impact inflation has had on the universe we observe and thus understand precisely what observation can tell us about inflation and how it may fit into a fundamental theory of physics. We will show the conditions under which the cosmological correlation functions generated during inflation are conserved, and thus identify the conditions which allow us to use observations today to learn about inflation. We first prove a general result which applies only to the leading approximation of the correlation functions, and then we discuss how to treat the additional complications that come with subleading corrections. Next, we will discuss the observational implications of achieving the conditions for conservation for a particular class of inflationary models. Lastly, we discuss one example of how observations can be used to probe non-inflationary physics beyond the standard cosmological model.Show more Item Inflation targeting in emerging countries: the exchange rate issues(Texas A&M University, 2004-09-30) Reyes Altamirano, Javier ArturoShow more The current discussion of Inflation Targeting (IT) in emerging economies deals with the effects that nominal exchange rate movements have on the overall inflation rate. The literature has focused in the analysis of the advantages and disadvantages that IT has with respect to other monetary policy regimes and the relevancy of the nominal exchange rate pass-through effect into inflation. So far none of them have dealt with the differences arising from the policy instruments used to fight off inflationary pressure under an IT regime. The literature on IT for emerging economies can be separated in two categories. In the first category the monetary authority uses interest rate policy as the instrument variable to implement and control the inflation target. The second category illustrates when the monetary authorities use international reserves as the instrument to influence the nominal exchange rate in such a way that the depreciation rate is consistent with the overall inflation target. This dissertation presents a model in which both policy instruments are available to the monetary authority. This model is used to address two questions: i) Is IT better than a monetary rule regime? and ii) Is it better to intervene directly in the foreign exchange market rather than use interest rate policy to control exchange rate pressure on inflation, or are they equivalent? The results show that there are important differences between these choices and the answers to these questions are shock dependent. These differences arise because the intervention needed under IT is accompanied by important output costs or benefits depending on the direction of the shock being analyzed. Regarding the pass-through effect, some studies have shown that the pass-through effect from currency depreciation into inflation has been decreasing and therefore is becoming less of an issue for these countries. The literature has offered different explanations for these declines but so far they have not been directly linked to the adoption of IT. This dissertation shows that lower pass-through levels can be a natural result of fear of floating observed in emerging countries that adopted IT and therefore exchange rate effects on inflation are still relevant.Show more Item Modeling and constraining inflationary and pre-inflationary eras(2016-08) Aravind, Aditya; Paban, Sonia; Fischler, Willy; Distler, Jacques; Kilic, Can; Shapiro, Paul RShow more The paradigm of cosmic inflation has had great success in explaining the statistical properties of fluctuations in the Cosmic Microwave Background (CMB). In this dissertation we discuss a few avenues for modeling and constraining the inflationary universe - constraints on excited states of inflationary fluctuations, some aspects of multi-field tunneling and also constraints on and predictions from a specific model of inflation connecting Higgs physics and dark matter. First, we show that in standard single field slow roll inflation, Bogoliubov excitations of the fluctuation spectrum are tightly constrained by observations. These constraints ensure that the squeezed limit non-gaussianity obtained from such excited states cannot be large. They also rule out any significant imprints in the CMB coming from a sudden transition from kinetic energy domination to inflation. We then explore tunneling in the context of field theory, a scenario that has potential relevance to the pre-inflationary universe. We discuss subtleties involved in choosing the trajectory for tunneling out of a metastable vacuum in a multi-field potential. In particular, we use exact solutions and scaling relations to show that tunneling may happen along directions with large barriers, thus making the common intuition coming from quantum mechanical tunneling unreliable in estimating the tunneling trajectory and therefore, the bounce action. We then explore a specific model of inflation that involves the addition of a scalar singlet and fermionic dark matter to the standard Higgs inflation scenario. We show that dark matter constraints and the requirement to support successful inflation significantly constrain the available parameter space for this model. We also find that the model generically predicts a small value of the tensor-to-scalar ratio r, similar to standard Higgs inflation, though it allows for a larger range of values for the scalar spectral tilt nS.Show more Item Single field inflation : observables and constraints(2014-08) Kundu, Sandipan; Fischler, WillyShow more One of the exciting aspects of cosmology is to understand the period of `cosmic inflation' that powered the epoch of the Big Bang. Inflation has been very successful in explaining several puzzles of the standard big bang scenario. But the most important success of inflation is that it can explain the temperature fluctuations of cosmic microwave background and the large scale structures of the universe. Despite its great success, the details of the physics of inflation are still unknown. A large number of models of inflation successfully explain all the observations making it remarkably hard to distinguish between different models. We explore the possibility of differentiating between different inflationary models by studying two-point and three-point functions of primordial fluctuations produced during inflation. First, we explore possible constraints on the inflationary equation state by considering current measurements of the power spectrum. Next, we explore the possibility of a single field slow-roll inflationary model with general initial state for primordial fluctuations. The two-point and three-point functions of primordial fluctuations are generally computed assuming that the fluctuations are initially in the Bunch-Davies state. However, we show that the constraints on the initial state from observed power spectrum and local bispectrum are relatively weak and for slow-roll inflation a large number of initial states are consistent with the current observations. As the precision of the observations is increasing significantly, we may learn more about the initial state of the fluctuations in the near future. Finally, we explore the consistency relations for the three-point functions, in the squeezed limit, of scalar and tensor perturbations in single-field inflation that in principle can be used to differentiate between single-field and multi-field inflation models. However, for slow-roll inflation, we find that it is possible to violate some of the consistency relations for initial states that are related to the Bunch-Davies state by Bogoliubov transformations and we identify the reason for the violation. Then we discuss the observational implications of this violation.Show more Item The effect of inflation on poverty in developing countries: A panel data analysis(2012-08) Talukdar, Shahidur R; Rahnama, Masha; Valcarcel, Victor J.Show more ABSTRACT - The aim of this thesis is to study the effect of inflation on poverty in developing countries. I analyze the effect of inflation on poverty with a panel dataset comprising of 115 developing countries over the period 1981 - 2008. The dataset comprises of 10 observations for each country as the data is available at 3 year intervals. As previous studies indicate that poverty is also affected by factors such as income, external debt, educational attainment, and quality of governance, besides inflation, I take these as independent variables and poverty as the dependent variable. With the help of regression analysis, I find evidence supporting the view that inflation in, general, is positively correlated with poverty while income, educational attainment, and quality of governance show negative correlation with poverty in most of the specifications. Apart from the study of all the countries combined, I separately analyze the effect of inflation on poverty in low income countries, lower middle income countries, and upper middle income countries to see whether the effect of inflation is similar or different in countries with different levels of income. I find that although in most of the cases inflation shows a positive and statistically significant correlation with poverty, however, in the case of low income countries, the relationship between inflation and poverty is negative and statistically insignificant under certain specifications.Show more Item Understanding the signatures of single-field inflation in cosmological probes(2013-08) Ganc, Jonathan Gabriel; Paban, Sonia; Komatsu, EiichiroShow more I will investigate the primordial squeezed limit bispectrum as produced by inflation in single-field models. Previous results have argued that generically, single-field inflation produces a negligible bispectrum. However, more careful evaluation yields a more ambiguous result. I will discuss an alternate method for calculating the squeezed limit bispectrum for a general single-field inflation model. I will also explore slow-roll inflation with a non-standard initial state, where we find an enhanced squeezed-limit. I will discuss the detectability of such models in various cosmological observables such as the Cosmic Microwave Background (CMB), Large Scale Structure, and mu-distortion of the CMB.Show more