The real bills doctrine

An abstract for this article is not available.Money theory

Actual and perceived inflation

The concept of inflation perceived by consumers came in the recent debate on inflation since it may affect consumer behaviour even if the perception was completely wrong. A misperception of inflation occurs particularly when households tend to label incorrectly inflation what really is a reduction in their disposable income, as in declining or stagnant economies and during public budget consolidation processes. Also a cash changeover may alter the perception of price changes. Nevertheless, even in a perfect perception framework, each consumer evaluates the inflation rate taking into account only his own consumption basket and the dynamics of the particular prices he pays. Hence, perceived inflation may differ systematically from the official one calculated by the statistical agencies, that necessarily make use of a common basket of consumption and the average market price of each product. The official inflation rate may be either beyond or below the average individual inflation rate in accordance with the sign of the covariance between individual budget shares and the corresponding price changes. Since economic theory suggests that the latter sign is positive under price discrimination, inflation faced by consumers is often higher than the official one. As far as the perceived inflation is strictly related to the cost of living, an aggregation fallacy may bias downward the estimation of official consumer price indices. At variance, just under price discrimination, firms tend to perceive an inflation rate very close to the official one, or even smaller. The arguments above provide a number of testable consequences.Aggregation fallacy; Inflation measurement; Perceived inflation; Price discrimination

Concepts and Their Dynamics: A Quantum-Theoretic Modeling of Human Thought

We analyze different aspects of our quantum modeling approach of human concepts, and more specifically focus on the quantum effects of contextuality, interference, entanglement and emergence, illustrating how each of them makes its appearance in specific situations of the dynamics of human concepts and their combinations. We point out the relation of our approach, which is based on an ontology of a concept as an entity in a state changing under influence of a context, with the main traditional concept theories, i.e. prototype theory, exemplar theory and theory theory. We ponder about the question why quantum theory performs so well in its modeling of human concepts, and shed light on this question by analyzing the role of complex amplitudes, showing how they allow to describe interference in the statistics of measurement outcomes, while in the traditional theories statistics of outcomes originates in classical probability weights, without the possibility of interference. The relevance of complex numbers, the appearance of entanglement, and the role of Fock space in explaining contextual emergence, all as unique features of the quantum modeling, are explicitly revealed in this paper by analyzing human concepts and their dynamics.Comment: 31 pages, 5 figure

Monetary economics from econophysics perspective

This is an invited article for the Discussion and Debate special issue of The European Physical Journal Special Topics on the subject "Can Economics Be a Physical Science?" The first part of the paper traces the personal path of the author from theoretical physics to economics. It briefly summarizes applications of statistical physics to monetary transactions in an ensemble of economic agents. It shows how a highly unequal probability distribution of money emerges due to irreversible increase of entropy in the system. The second part examines deep conceptual and controversial issues and fallacies in monetary economics from econophysics perspective. These issues include the nature of money, conservation (or not) of money, distinctions between money vs. wealth and money vs. debt, creation of money by the state and debt by the banks, the origins of monetary crises and capitalist profit. Presentation uses plain language understandable to laypeople and may be of interest to both specialists and general public.Comment: 23 pages, 1 figur