Israel 1983: A bout of unpleasant monetarist arithmetic?
AbstractThis paper claims that anticipations of a promised massive future government bailout of owners of fallen bank shares suddenly caused a big jump in inflation in Israel in October 1983. That month, the government promised that four or five years later it would compensate innocent people for the fall in the value of their bank shares. We reason that the public believed that promise, that it understood that the public debt must jump, and further that the public anticipated that the government would finance that debt via a future monetary expansion. That sparked an immediate jump in inflation via the unpleasant monetarist arithmetic of Sargent and Wallace (1981). (Copyright: Elsevier)
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Bibliographic InfoArticle provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.
Volume (Year): 14 (2011)
Issue (Month): 3 (July)
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Other versions of this item:
- Thomas Sargent & Joseph Zeira, 2011. "Code and data files for "Israel 1983: A Bout of Unpleasant Monetarist Arithmetic"," Computer Codes 08-166, Review of Economic Dynamics.
- Sargent, Thomas J & Zeira, Joseph, 2008. "Israel 1983: A Bout of Unpleasant Monetarist Arithmetic," CEPR Discussion Papers 6792, C.E.P.R. Discussion Papers.
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
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.:
- Sussman, Oren, 1992. "Financial Liberalization: The Israeli Experience," Oxford Economic Papers, Oxford University Press, vol. 44(3), pages 387-402, July.
- Drazen, Allan & Helpman, Elhanan, 1987. "Stabilization with Exchange Rate Management," The Quarterly Journal of Economics, MIT Press, vol. 102(4), pages 835-55, November.
- Bental, Benjamin & Eckstein, Zvi, 1990.
"The Dynamics of Inflation with Constant Deficit under Expected Regime Change,"
Royal Economic Society, vol. 100(403), pages 1245-60, December.
- Bental, B. & Eckstein, Z., 1988. "The Dynamics Of Inflation With Constant Deficit Under Expected Regime Change," Papers 35-88, Tel Aviv.
- Zeira, Joseph, 1989. "Inflationary inertia in a wage-price spiral model," European Economic Review, Elsevier, vol. 33(8), pages 1665-1683, October.
- Thomas J. Sargent & Neil Wallace, 1981. "Some unpleasant monetarist arithmetic," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
- Thomas Sargent & Noah Williams & Tao Zha, 2006.
"The Conquest of South American Inflation,"
NBER Working Papers
12606, National Bureau of Economic Research, Inc.
- יוסף זעירא in Wikipedia (Hebrew)
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