Inflation and Eternal Inflation

The basic workings of inflationary models are summarized, along with the arguments that strongly suggest that our universe is the product of inflation. The mechanisms that lead to eternal inflation in both new and chaotic models are described. Although the infinity of pocket universes produced by eternal inflation are unobservable, it is argued that eternal inflation has real consequences in terms of the way that predictions are extracted from theoretical models. The ambiguities in defining probabilities in eternally inflating spacetimes are reviewed, with emphasis on the youngness paradox that results from a synchronous gauge regularization technique. Vilenkin's proposal for avoiding these problems is also discussed.Comment: 27 pages, including 5 figures, LaTeX (elsart macros for Physics Reports, included). To be published in the David Schramm Memorial Volume of Physics Report

Inflation targeting and inflation persistence

This paper argues that the adoption of an inflation target reduces the persistence of inflation. We develop the theoretical literature on inflation persistence by introducing a Taylor rule for monetary policy into a model of persistence and showing that inflation targets reduce inflation persistence. We investigate changes in the time series properties of inflation in seven countries that introduced inflation targets in the late 1980s or early 1990s. We find that the persistence of inflation is greatly reduced or eliminated following the introduction of inflation targets

The euro and inflation uncertainty in the European Monetary Union

In this paper, we investigate empirically the relationship between inflation and inflation uncertainty in twelve EMU countries. We estimate a time-varying parameter model with a GARCH specification for the conditional volatility of inflation in order to distinguish between short-run (structural and impulse) and steady-state uncertainty. We then introduce a dummy variable to model the policy regime shift which occurred in 1999 with the introduction of the Euro, and its effects on the links between inflation and inflation uncertainty. We find that steady-state inflation has generally remained stable (with the important exception of Germany, where the trend has become positive), steady-state inflation uncertainty and inflation persistence have both increased, and the relationship between inflation and inflation uncertainty has broken down in many countries. These findings cast doubt on the optimistic view taken by the ECB concerning its success in controlling inflation, and suggest the need for improvements in its analytical framework

General Analysis of Inflation in the Jordan frame Supergravity

We study various inflation models in the Jordan frame supergravity with a logarithmic Kahler potential. We find that, in a class of inflation models containing an additional singlet in the superpotential, three types of inflation can be realized: the Higgs-type inflation, power-law inflation, and chaotic inflation with/without a running kinetic term. The former two are possible if the holomorphic function dominates over the non-holomorphic one in the frame function, while the chaotic inflation occurs when both are comparable. Interestingly, the fractional-power potential can be realized by the running kinetic term. We also discuss the implication for the Higgs inflation in supergravity.Comment: 16 pages, 1 figur

Axion monodromy inflation with sinusoidal corrections

We study the axion monodromy inflation with a non-perturbatively generated sinusoidal term. The potential form is a mixture between the natural inflation and the axion monodromy inflation potentials. The sinusoidal term is subdominant in the potential, but leaves significant effects on the resultant fluctuation generated during inflation. A larger tensor-to-scalar ratio can be obtained in our model. We study two scenarios, single inflation scenario and the double inflation scenario. In the first scenario, the axion monodromy inflation with a sufficient number of e-fold generates a larger tensor-to-scalar ratio about $0.1 - 0.15$ but also a tiny running of spectral index. In the second scenario of double inflation, axion monodromy inflation is its first stage and, we assume another inflation follows. In this case, our model can realize a larger tensor-to-scalar ratio and a large negative running of spectral index simultaneously.Comment: 12 pages, 3 figures, version accepted for publication in PTEP: References and some comments added, and typos correcte

Optimal contracts for central bankers: calls on inflation

We consider a framework featuring a central bank, private and financial agents as well as a financial market. The central bank's objective is to maximize a functional, which measures the classical trade-off between output and inflation plus income from the sales of inflation linked calls minus payments for the liabilities that the inflation linked calls produce at maturity. Private agents have rational expectations and financial agents are averse against inflation risk. Following this route, we explain demand for inflation linked calls on the financial market from a no-arbitrage assumption and derive pricing formulas for inflation linked calls, which lead to a supply-demand equilibrium. We then study the consequences that the sales of inflation linked calls have on the observed inflation rate and price level. Similar as in Walsh (1995) we find that the inflationary bias is significantly reduced, and hence that markets for inflation linked calls provide a mechanism to implement inflation contracts as discussed in the classical literature