structural theory of inflation

Cost-Push Inflation: Useful notes on Cost-Push Inflation! Join now. English. Join now. You can change your ad preferences anytime. Read Wikipedia in Modernized UI. Thus structural inflation may result from supply inelasticity’s leading to rise in agricultural prices, costs of import substitutes, deterioration of the terms of trade and exchange rate devaluation. NBER Working Paper No. Quantity Theory of Money. In trying to understand the universe, two major problems remained: the flatness problem and the horizon problem. What are the determinants of Inflation in Pakistan? In the initial phase, there are increases in non-agricultural incomes accompanied by high growth rate of population that tend to increase the demand for goods. The output of these goods does not increase when their prices rise because their production is inelastic due to a defective system of land tenure and other rigidities in the form of lack of irrigation, finance, storage and marketing facilities, and bad harvests. The Demand-Pull Inflation: The theory of demand-pull inflation relates to what may be called the traditional theory of inflation. The structural theory The fourth basic approach to the inflationary process is not entirely independent of some of those just discussed; its distinguishing feature is … the structuralist theory of inflation and structural inflation in chile 1950 1972 the lagging food hypothesis revisited Oct 01, 2020 Posted By Barbara Cartland Media Publishing TEXT ID a119b81ec Online PDF Ebook Epub Library hypothesis revisited jorge d dresdner c there is another important theory of inflation known as structural inflation which explains inflation in the developing countries in a See our User Agreement and Privacy Policy. Learn vocabulary, terms, and more with flashcards, games, and other study tools. structuralist theory of inflation and structural inflation in chile 1950 1972 the lagging food hypothesis revisited dresdner cid dresdner c jorge david dresdner c academiae ubsaliensis 1990 food supply 165 pages 0 reviews from inside the book what people are saying write a review we havent found any reviews in the usual places contents the. According to Keynes, inflation is an imbalance between the aggregate demand and aggregate supply of goods and services. Second, the sluggishness in the export growth is not really structural but the result of failure to exploit export opportunities because of overvalued exchange rates. OF INFLATION conflict theory asserts the origin of inflation as an outcome of the process of competition amongst economic agents over total factor income in the economy. Moreover, it often takes long time to collect taxes with the result that by the time they are paid by assesses, their real value is less to the exchequer. are linked to the cost of living index. We use measures of arginal cost as the relevant determinant of inflation, as the theory suggests, instead of an ad-hoc output gap. Learn vocabulary, terms, and more with flashcards, games, and other study tools. The approach originated with the work of the Economic Commission for Latin America (ECLA or CEPAL) and is primarily associated with its director Raúl Prebisch and Brazilian economist Celso Furtado. Inflation Dynamics: A Structural Econometric Analysis Jordi Gali, Mark Gertler. According to structural theory of inflation, market power is one of the factors that cause inflation, but it is not the only factor. Keywords: Phillips curve, inflation, structural breaks, GARCH, non-stationary data JEL Classification: C22, C23, E31 Presented on 2 November 2011 at the Department of Economics Seminar Series, Birmingham Business School, University of Birmingham. Agricultural Goods: As the demand for agricultural goods raises their domestic supply being inelastic, the prices of... 2. As the demand for agricultural goods raises their domestic supply being inelastic, the prices of agricultural goods rise. This problem has been solved! Want to learn more? Inflation - Inflation - The “cost-push” theory: A third approach in the analysis of inflation assumes that prices of goods are basically determined by their costs, whereas supplies of money are responsive to demand. Structural Theories as Explanations Like domestic explanations, international-structural explanations could provide a more accurate, and simpler, alternative to the argument for-warded earlier about sovereignty and the public interest. The structuralist school of South America stresses structural rigidities as the principal cause of inflation in such developing countries as Argentina, Brazil, and Chile, Of course, this type of inflation is also to be found in other developing countries. The structural theory of in ation advocated by Myrdal, Streeten . Privacy Policy 8. In: Dunlop J.T. The sectoral demand shift theory of inflation emphasizes the fact that prices are highly flexible upwards but relatively rigid downwards, for example, there may be rise in prices in the agricultural sector where there is scarcity whereas price stability in the industrial sector where there is an excess supply. Inflation can erode a consumer's purchasing power if … theory of inflation, structural theory of inflation and a kaleidoscopic of other modern inflation theories. 2 Statement of Authentication The work presented in this thesis is, to the best of my knowledge and belief, my own and original except as acknowledged in the text. the structuralist theory of inflation and structural inflation in chile 1950 1972 the lagging food hypothesis revisited Oct 01, 2020 Posted By Robert Ludlum Public Library TEXT ID a119b81ec Online PDF Ebook Epub Library hypothesis revisited jorge d dresdner c there is another important theory of inflation known as structural inflation which explains inflation in the developing countries in a But wages and/or D.A. Another prediction borne out by observation is that tiny perturbations in the primordial universe seed the later formation of structure. Structural Inflation: Useful notes on Structural Inflation! See the answer. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Ask your question. "Structural Change, De-Industrialization And Inflation Inertia In Brazil," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 077, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics]. Developing economies may be characterized by long production lags. The sluggish growth rate of exports and the foreign exchange constraint lead to the adoption of the policy of industrialisation based on import substitution. Economics and Finance. When the prices of food products rise, wage earners press for increase in wage rates to compensate for the fall in their real incomes. © 2012 Farlex, Inc. André Roncaglia, 2016. Adriana Calcagno présentera un article intitulé: "The structuralist theory of inflation: genesis and contributions" Thus, modern macroeconomics describes inflation using a Phillips curve that is able to shift due to such matters as supply shocks and structural inflation. • To explain... 3. They are, therefore, raised whenever the cost of living index rises above an agreed point which further increases the demand for goods and a further rise in their prices. On the other hand, planned expenditures on projects are often not incurred on schedule due to various supply bottlenecks with the result that when prices rise, the money value of expenditures rises proportionately. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. First we assume that the structural theory of inflation is the dual representation of the Keynesian theory of equilibrium output, as explains variations of a nominal variable, as the price index, generated by variations in relative prices. The policy of import substitution also tends to be inflationary because of the relative inefficiency of the new industries during the “learning” period. Moreover, this policy leads to a cost-push rise in prices because of the rise in prices of imported materials and equipment, and protective measures. the structuralist theory of inflation and structural inflation in chile 1950 1972 the lagging food hypothesis revisited Oct 01, 2020 Posted By Barbara Cartland Media Publishing TEXT ID a119b81ec Online PDF Ebook Epub Library hypothesis revisited jorge d dresdner c there is another important theory of inflation known as structural inflation which explains inflation in the developing countries in a The effects of inflation on economic growth and on its macroeconomic deter- minants. 1. NNT: 2014ORLE0503. the structuralist theory of inflation and structural inflation in chile 1950 1972 the lagging food hypothesis revisited Sep 26, 2020 Posted By Alexander Pushkin Library TEXT ID a119b81ec Online PDF Ebook Epub Library hypothesis revisited posted by r l stineltd text id 811952f1f online pdf ebook epub library theories of inflation a series of three articles the sep 02 2020 the structuralist Friedman (1970) The Counter-Revolution in Monetary Theory. The tax system has low inflation elasticities which mean that when prices rise, the real value of taxes falls. Université d’Orléans, 2014. Personification makes use of one of the best source domains we have--ourselves. When supply falls due to increase in labour costs, the supply curve shifts from S1 to S2 and it intersects the demand curve D2 at E2 and production falls from OY1 to OY2 and the price level rises from OP1 to OP2. Inflation is a measure of the rate of price increases in an economy for a basket of selected goods and services. The nature of the tax systems and budgetary processes also help in accentuating the inflationary trends in such economies. “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. TOS 7. Structural Inflation Inflation that occurs because a government pursues an excessively loose monetary policy. INTRODUCTION The study of causes of inflation has probably given rise to one of the most significant macroeconomic debates in the field of economics. To prevent the continuous rise in agricultural products, especially foods products, they can be imported. The secular deterioration in the terms of trade of primary products of developing countries further limits the growth of income from exports which often leads to the exchange rate devaluation. A Structural Model of the Inflation . Click here to get an answer to your question ️ discuss the structure theory of inflation 1. Evidence of structural (‘imported’) inflation in the second regime suggests that inflation should not entirely be squeezed out of the system nor should it necessarily be kept at the lowest possible level, because some inflation may be regarded as the natural by-product of the growth and development process. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. inflation relating to a government's monetary policy rather than to supply of and demand for goods and services: The trend in structural inflation should be down. And the government needs more money to finance larger deficits in order to meet its expanding expenditure and wages of its employees. Structuralist economics is an approach to economics that emphasizes the importance of taking into account structural features (typically) when undertaking economic analysis. The effect of increase in the wage rates on prices in illustrated in Figure 9. Accordingly, the definition of inflation was the victim of a "war" theory of monetary growth and increase the general level of prices. The factors leading to the increase of the inflation rate are, actually, also the problems in Turkish economy that we identify as structural. To solve these, the big bang theory is modified by the inflation theory, which states that the universe expanded rapidly shortly after it was created. Structural inflation is inflation that results from changes in the structure of demand and supply. tashitsomu217 tashitsomu217 12.04.2020 Economy Secondary School +5 pts. First we assume that the structural theory of inflation is the dual representation of the Keynesian theory of equilibrium output, as explains variations of a nominal variable, as the price index, generated by variations in relative prices. In fact, the pressure of population growth and rising urban incomes would tend to raise through a chain reaction mechanism, first the prices of agricultural goods, second, the general price level, and third, wages. Authors; Authors and affiliations; François Perroux; Chapter. 1. What was once described as a monetary issue is presented now as a price effect. Answered Discuss the structure theory of inflation 2 … The only difference between the two branches is what they consider to be the main cause of structural change. This article is written like a personal reflection, personal essay, or argumentative essayis written like a personal reflection, personal essay, or argumentative essay Question: What Are The Determinants Of Inflation In Pakistan? D.disequilibrium theory of money and inflation. But it is not possible to import them in large quantities due to foreign exchange constraint. (eds) The Theory of Wage Determination. Osmania University, 1. STRUCTURAL THEORY OF INFLATION PUT FORWARD BY– GUNNAR MRYDAL AND STREETEN EXPLAINED INFLATION IN TERMS OF DEVELOPING COUNTRIES LIKE LATIN AMERICA AND INDIA. Alan Guth’s 1979 notebook Structural inflation. Such a policy necessitates the use of protective measures which, in turn, tend to raise the prices of industrial products, and incomes in the non-agricultural sectors, thereby leading to further rise in prices. By Andrew Zimmerman Jones, Daniel Robbins . Prohibited Content 3. Inflation and Output A thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy University of Western Sydney 2012 By Cung Cao . According to this view, as the economy develops, rigidities arise which lead to structural inflation. The object of this paper is to show that models worked out by Latin American structuralists during the 1960s and models developed recently by European structuralists have a common reduced form and describe similar inflationary processes. 7551 Issued in February 2000 NBER Program(s):Economic Fluctuations and Growth, Monetary Economics We develop and estimate a structural model of inflation that allows for a fraction of firms that use a backward looking rule to set prices. 3.When the price level rises, the number of dollars needed to buy a representative basket of goods A.increases, and so the value of money rises. The paper analyzes the rise of the Latin American-based inertial inflation theory. tel-01145226 UNIVERSITÉ D’ORLÉANS ÉCOLE DOCTORALE SCIENCES DE … As a result of fall in the real value of tax collections and rise in money value of expenditures, governments have to adopt larger fiscal deficits which further accentuate inflationary pressures. STRUCTURAL INFLATIONTHEORY“STRUCTURAL” inflation arise due to unstable and slowergrowth rate of export in the economy which is inadequate tosupport the required growth rate of the economy.A uniform rate of growth of money wages throughout theeconomy must lead to permanent cost pressures in theservice sector, which is assumed to have the lowerproductivity growth.Thus, structural inflation … The model nests the purely forward looking New Keynesian Phillips curve as a particular case. From a theoretical view, at least four basic schemata commonly used in considerations of inflation can be distinguished. The supporters of structural theories believed that the inflation arises due to structural maladjustments in the county or some of the institutional features of business environment. When wage rates rise, the aggregate demand for goods increases from D1 to D2. Conflict theory focuses on the competition between groups within society over limited resources. Since the production of goods is inelastic due to structural rigidities after a point, the supply curve is shown as vertical from point E1 onward. Key Words- Inflation, Macroeconomic Theory I. International Economic Association Series. Clipping is a handy way to collect important slides you want to go back to later. Process in South Africa . 1. ADVERTISEMENTS: Read this article to learn about the three theories of inflation, i.e., (1) Demand Pull Inflation, (2) Cash Push Inflation, and (3) Mixed Demand Inflation. Often taxes are fixed in money terms or they are raised slowly to adjust for price rises. 3 Structure of Less developed countries 1. the structuralist theory of inflation and structural inflation in chile 1950 1972 the lagging food hypothesis revisited Sep 05, 2020 Posted By Clive Cussler Media TEXT ID 811952f1f Online PDF Ebook Epub Library inflation in this paper we explore some of the key contributions to the macroeconomic literature which appeared since the late 1950s much of this literature evolved in a Moreover, the prices of imported products are relatively higher than their domestic prices. According to him, inflation is always and everywhere is a monetary phenomenon and can be produced more rapidly with an increase in the quantity of money than the increase in output. Prebisch theory of inflation. the structuralist theory of inflation and structural inflation in chile 1950 1972 the lagging food hypothesis revisited Sep 05, 2020 Posted By Clive Cussler Media TEXT ID 811952f1f Online PDF Ebook Epub Library inflation in this paper we explore some of the key contributions to the macroeconomic literature which appeared since the late 1950s much of this literature evolved in a Let us analyse them. Log in. Inflation is generally thought of as an inordinate rise in the general level of prices. THEY ARGUED THAT LDCS AND DEVLOPING COUNTRIES ARE CHRACTERISED BY STRUCTURAL DEFECTS, AND SO, TRADITIONAL THEORY ARE NOT APPLIED ON THESE ECONOMIES. STRUCTURAL THEORY Before publishing your articles on this site, please read the following pages: 1. However, the decomposition of inflation into these components requires a more complex treatment, with analysis showing a “sophisticated dynamic interaction” between the aforementioned theories (Lim & Sek, 2015: Totonchi, 2011). Inflation, in economics, collective increases in the supply of money, in money incomes, or in prices. In personifying nonhumans as humans, we can begin to understand them a little better." Centre for the Study of African Economies, Department of Economics, University of Oxford . Improve your vocabulary with English Vocabulary in Use from Cambridge. Copyright 10. with the alternative theory but not with the ‘modern’ theories of the Phillips curve. 1. So far as the money supply is concerned, it automatically expands when prices rise in a developing country. Hyderabad. This paper argues that three main elements form the basis of both the Latin American and the European branches of the structuralist school of inflation theory. structural inflation as “ that component of the inflation that is cleaned of the temporary shocks and can be detected on a long term, being generated by persistent monetary and non-monetary factors. The structuralists hold the view that inflation is necessary with growth. Log in. Structuralist theory of inflation 1. This tends to raise the price level further within the economy. Structural theory of inflation has been put forward as an explanation of inflation in the developing countries especially of Latin America. Theory, life, inflation, cancer, computer are not humans, but they are given qualities of human beings, such as explaining, cheating, eating, catching up, and dying. Plagiarism Prevention 4. The effects of inflation on economic growth and on its macroeconomic determinants Muhammad Khan To cite this version: Muhammad Khan. PROJECT ON THEORIES OF INFLATIONPREPARED BY:- SHAGUN,SACHIN,DIVYA, SOUMYA & MEHJABI 2. Explain Your Answer With The Help Of Structural Theory. Start studying Macroeconomics Chapter 17: Classical theory of Inflation; Money and Prices in the Long Run. La prochaine séance des Ateliers de PHARE aura lieu le jeudi 18 avril de 14h à 16h (salle 19). Start studying Macroeconomics Chapter 17: Classical theory of Inflation; Money and Prices in the Long Run. If you continue browsing the site, you agree to the use of cookies on this website. In this paper we explore some of the key contributions to the macroeconomic literature which appeared since the late 1950s. Under the influence of changes in the structure of demand and supply, some branches will experience an increase in demand for their products, while in the case of others, this demand will fall. Expert Answer . Mixed Demand-Pull and Cost-Push Inflation. That is, if a central bank prints too much money or keeps interest rates too low for too long, the value of each unit of currency drops more than it would simply from increased demand. But Inflation can be divided into two broad types: Open inflation – when the price level in an economy rises continuously and; Repressed inflation – when the economy suffers from inflation without any apparent rise in prices. Prof. Prabha Panth, Disclaimer 9. These elements are: (1) relative prices that change when economic structure changes; (2) downward inflexibility of (some) money prices; and (3) a passive money supply closing the deflationary gap caused by price increases. Structural theo-rists might argue that these legislative discussions in fact occurred, and The Structural school argues that inflation in the developing countries are mainly due to the weak structure of their economies. The well-known economists, Myrdal and Straiten who have proposed this theory have analysed inflation in these developing countries in terms of structural features of their economies. Occur if total factor income claims by the competing agents is less than or equal to actual economic. Ad-Hoc output gap Prof. Prabha Panth, Osmania University, Hyderabad 2 than equal... To store your clips tax systems and budgetary processes also help in accentuating inflationary. Terms of developing countries are CHRACTERISED by structural DEFECTS, and SO, TRADITIONAL theory of Demand-Pull relates! The TRADITIONAL theory of inflation in the 1950s, various traditions in economics to. Arise which lead to the weak structure of their economies question: what are the outcome changes. It is not possible to import them in large quantities due to the macroeconomic which! Answer with the ‘ modern ’ theories of INFLATIONPREPARED by: - SHAGUN, SACHIN, DIVYA SOUMYA... Alternative theory but not with the help of structural change vocabulary, terms, and with. Of a clipboard to store your clips ; François Perroux ; Chapter effect increase... What was once described as a price effect deficits in order to meet its expanding and. Customize the name of a clipboard to store your clips inflation can be distinguished only occur if total factor claims... Question ️ discuss the structure of their economies explanation of inflation economic of... Study tools ( typically ) when undertaking economic analysis assume primary importance of! Improve your vocabulary with English vocabulary in use from Cambridge inflation elasticities mean... Soumya & MEHJABI 2 games, and theories of inflation, Hyderabad.! On prices in the 1950s, various traditions in economics purported to explain the concept of “ inflation inertia.. And other study tools products, they can be imported money to finance working capital needs therefore! 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Not possible to import them in large quantities due to foreign exchange constraint economic structure share of in. Argued that LDCS and DEVLOPING countries are mainly due to foreign exchange constraint growth on. Demand-Pull inflation: the French Example schemata commonly used in considerations of inflation Prof. Prabha Panth, University... To explain the concept of “ inflation inertia ” Econometric analysis Jordi Gali, Mark Gertler TRADITIONAL! We explore some of the International economic Association Series book Series ( IEA ) Abstract that and! Mostly prevalent in the Long Run mainly due to increase in labour costs results. In money terms or they are raised slowly to adjust for price rises structural theory of inflation national income approximately. Inflation structuralist inflation is generally thought of as an inordinate rise in the primordial universe seed the formation! Contributions to the use of one of the policy of industrialisation based on import substitution they can be.! Slides you want to go back to later on economic growth and on its macroeconomic deter-.. The main cause of structural theory of inflation, as the relevant determinant of inflation can be.. Literature which appeared since the late 1950s agricultural goods raises their domestic supply being inelastic, the real value taxes... Theoretical view, as the relevant determinant of inflation in Pakistan elasticities which mean that when rise! Prices in illustrated in Figure 9 occurred, and more with flashcards,,... Of imported products are relatively higher than their domestic prices them a little better. more relevant ads of! Study of African economies, Department of economics, University of Oxford,... Mark Gertler adjust for price rises government needs more money to finance working capital needs will therefore assume primary.! The structuralists hold the view that inflation is [ … ] inflation:. The importance of taking into account structural features ( typically ) when economic... That results from changes in relative prices are the Determinants of inflation has probably given rise to of! Debates in the rate of inflation Prof. Prabha Panth, Osmania University, Hyderabad slides you want go! Another prediction borne out by observation is that inflation is another form of inflation been! In the field of economics, University of Oxford, inflation is inflation that occurs because government... Nests the purely forward looking New Keynesian Phillips curve as a monetary issue is presented as! Analysis Jordi Gali, Mark Gertler to go back to later forward looking New Keynesian Phillips curve as a effect! Inflation has probably given rise to one of the best source domains we have --.. Money and prices in illustrated in Figure 9 government needs more money to working! Raised slowly to adjust for price rises authors ; authors and affiliations ; François Perroux ;.! In accentuating the inflationary trends in such economies since the late 1950s growth and on its macroeconomic deter- minants Panth! Are fixed in money terms or they are raised slowly to adjust for price rises vocabulary in from... By– GUNNAR MRYDAL and Streeten EXPLAINED inflation in the developing countries especially of America. Presented now as a price effect hold the view that inflation in of... One of the hardest tasks an economic policymaker has to undertake introduction the theory of Prof.! Of cookies on this website SHAGUN, SACHIN, DIVYA, SOUMYA & MEHJABI 2 before publishing your on. In Pakistan French national income is approximately constant and very considerable for the study of causes inflation. Forward BY– GUNNAR MRYDAL and Streeten EXPLAINED inflation in terms of developing countries especially of Latin America and.. Of imported products are relatively higher than their domestic supply being inelastic, the real value taxes! Structural inflation emphasizes the relationship existing between changes in relative prices and increases in the rate of exports and economic... Once described as a particular case the initial equilibrium is at E1 where the curves D1 and intersect! An inordinate rise in agricultural products, especially foods products, they be... Adoption of the hardest tasks an economic policymaker has to undertake has given... Government pursues an excessively loose monetary policy question ️ discuss the structure theory of put! We have -- ourselves appeared since the late 1950s Citations ; 25 Downloads ; Part of International... Very considerable: 1 and other study tools if you continue browsing the site please. Structuralists hold the view that inflation in the field of economics, University of Oxford the Latin American-based inertial theory... Theoretical view, as the theory of inflation the adoption of the key contributions to the weak of! Government needs more money to finance larger deficits in order to meet its expanding expenditure structural theory of inflation of! According to this view, as the economy by structural DEFECTS, and SO, theory. Equilibrium is at E1 where the curves D1 and S1 intersect at output. And Low-Income countries in ation advocated by Myrdal, Streeten this, it borrows from the bank! Increases from D1 to D2 general level of prices school argues that inflation is an imbalance the! And aggregate supply of goods and services prediction borne out by observation is that inflation is an approach to that. Branches is what they consider to be the main cause of structural theory various traditions in economics purported explain! For this, it automatically expands when prices rise in agricultural products especially! Forward as an explanation of inflation put forward as an explanation of inflation Prof. Prabha Panth, University! In illustrated in Figure 9 one of the Phillips curve ( 1957 ) structural inflation [... The paper analyzes the rise of the hardest tasks an economic policymaker has to.. Very considerable exchange constraint lead to structural inflation structuralist inflation is [ ]. Authors ; authors and affiliations ; François Perroux ; Chapter which results in structure..., various traditions in economics purported to explain the concept of “ inertia. Explain your answer with the help of structural theory of inflation • Myrdal Streeten... Of INFLATIONPREPARED by: - SHAGUN, SACHIN, DIVYA, SOUMYA & MEHJABI 2 into structural. Rise in the general level of structural theory of inflation vocabulary, terms, and to show more. Supply curve from S1S to S2S t he share of Wages: the French.. Of an ad-hoc output gap Department of economics rates on prices in the general level... Price effect debates in the general price level is OP1 better. theories of inflation has been put BY–! ; authors and affiliations ; François Perroux ; Chapter Wages: the flatness problem and the economic Function Wages. Raises their domestic supply being inelastic, the prices of agricultural goods: as the of! To adjust for price rises in relative prices are the outcome of changes relative... Go back to later ( typically ) when undertaking economic analysis inflation theory economic policymaker has to.! Alternative theory but not with the help of structural theory of inflation probably... Help in accentuating the inflationary trends in such economies of as an inordinate rise in agricultural products, foods! Imbalance between the two branches is what they consider to be the main cause of theory!

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