Money and Prices in Models of Bounded Rationality in High Inflation Economies
AbstractThis paper studies the short run correlation of inflation and money growth. We study whether a model of learning does better or worse than a model of rational expectations, and we focus our study on countries of high inflation. We take the money process as an exogenous variable, estimated from the data through a switching regime process. We find that the rational expectations model and the model of learning both offer very good explanations for the joint behavior of money and prices. (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): 8 (2005)
Issue (Month): 2 (April)
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Other versions of this item:
- Albert Marcet & Juan Pablo Nicolini, 2005. "Money and prices in models of bounded rationality in high inflation economies," Economics Working Papers 875, Department of Economics and Business, Universitat Pompeu Fabra.
- Marcet, Albert & Nicolini, Juan Pablo, 2005. "Money and prices in models of bounded rationality in high inflation economies," Working Paper Series 0469, European Central Bank.
- Albert Marcet & Juan Pablo Nicolini, 2005. "Money and Prices in Models of Bounded Rationality in High Inflation Economies," Working Papers 217, Barcelona Graduate School of Economics.
- Albert Marcet & Juan Pablo Nicolini, 2004. "Money and Prices in Models of Bounded Rationality in High Inflation Economies," Working Papers 172, Barcelona Graduate School of Economics.
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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