This paper studies the relation between seigniorage and inflation in Argentina for the period 1979-1989. We estimate a money demand function and derive the Laffer curve for several sub-periods with different monetary/exchange rate regimes. We find that for most of the period the Argentine economy remained on the 'efficient' side of the Laffer curve. The long-run revenue maximizing rate of inflation has been around 20 percent per month for the 'tablita' (1979-1981) and post-Austral (1985-1988) periods and around 30 percent per month for the pre-Austral period (1982-1985). The long-run maximum level of seigniorage has been above 6 percent of GDP. Our results imply that the hyperinflation experienced by Argentina in 1989 can be interpreted as an unstable phenomenon that resulted from the need to collect a level of seigniorage that exceeded the maximum warranted by the demand for money. Copyright 1995 by Ohio State University Press.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).
Related research
Keywords:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)