IDEAS home Printed from https://ideas.repec.org/a/bba/j00001/v2y2023i2p34-55d36.html
   My bibliography  Save this article

A Virtual Economics Laboratory: What Generated High Inflation? 14 Different Explanations to One Inflation Period

Author

Listed:
  • Yair Barak

    (Cohn Institute for the History and Philosophy of Science and Ideas, Tel Aviv University, Tel Aviv, Israel)

Abstract

A high inflation period of seven years (1978-1985) in Israel, which turned into a hyperinflation, puzzled Israeli economists, who tried to understand its causes and mechanisms. As a result, they provided fourteen different explanations. Although all of the explanations were based on the same data, the researchers’ conclusions were either different or contradictory. This situation provides a virtual laboratory for the study of the ways and methods of economic thought; it is a classical Ceteris patribus situation. This laboratory further raises other subjects and questions. Are there principal differences between the economists' explanations? Is it possible to classify these differences? How do economic explanations for inflation differ from non-economic ones? In this article, I classified thirteen economic studies and one non-economic study into five clusters. This was the methodological tool used to inquire into the economic thought in this virtual laboratory.

Suggested Citation

  • Yair Barak, 2023. "A Virtual Economics Laboratory: What Generated High Inflation? 14 Different Explanations to One Inflation Period," Journal of Economic Analysis, Anser Press, vol. 2(2), pages 34-55, April.
    • Handle: RePEc:bba:j00001:v:2:y:2023:i:2:p:34-55:d:36
    as

    Download full text from publisher

    File URL: https://www.anserpress.org/journal/jea/2/2/24/pdf
    Download Restriction: no
    File URL: https://www.anserpress.org/journal/jea/2/2/24
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gordon, Robert J, 1975. "The Demand for and Supply of Inflation," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 807-836, December.
    2. Don Patinkin, 1993. "Israel's Stabilization Program of 1985, or Some Simple Truths of Monetary Theory," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 103-128, Spring.
    3. Gordon, Robert J, 1975. "The Demand for and Supply of Inflation: Reply to Brunner's Comments," Journal of Law and Economics, University of Chicago Press, vol. 18(3), pages 871-874, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert J. Gordon, 1982. "Why Stopping Inflation May Be Costly: Evidence from Fourteen Historical Episodes," NBER Chapters, in: Inflation: Causes and Effects, pages 11-40, National Bureau of Economic Research, Inc.
    2. Aurélien Goutsmedt & Goulven Rubin, 2018. "Robert J. Gordon and the introduction of the natural rate hypothesis in the Keynesian framework," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01821825, HAL.
    3. Dennis Patrick Leyden, 1992. "Donor-Determined Intergovernmental Grants Structure," Public Finance Review, , vol. 20(3), pages 321-337, July.
    4. Lafay Jean-Dominique, 1993. "La modelisation des interactions entre Economie et Politique dans les pays en developpement," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 4(4), pages 1-22, December.
    5. Prof.Dr. Cevat GERNI & Doc.Dr. O. Selcuk EMSEN & Dr. M. Kemal DEGER, 2005. "Erken Uyari Sistemlerý Yoluyla Turkiye’Deki Ekonomik Krizlerin Analizi," Istanbul University Econometrics and Statistics e-Journal, Department of Econometrics, Faculty of Economics, Istanbul University, vol. 2(1), pages 39-62, November.
    6. Thomas Willett, 1982. "Review," Public Choice, Springer, vol. 38(3), pages 329-334, January.
    7. António Afonso & José Alves & Oļegs Matvejevs & Oļegs Tkačevs, 2023. "Fiscal Sustainability and the Role of Inflation," CESifo Working Paper Series 10843, CESifo.
    8. Nikolai Stähler, 2009. "Taxing Deficits to Restrain Government Spending," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(1), pages 159-176, February.
    9. Olegs Tkacevs & Karsten Staehr & Katri Urke, 2023. "Fiscal Performance under Inflation and Inflation Surprises: Evidence from Fiscal Reaction Functions for the Euro Area," Working Papers 2023/04, Latvijas Banka.
    10. Patrick Honohan, 1994. "The Fiscal Approach to Financial Intermediation Policy," Papers WP049, Economic and Social Research Institute (ESRI).
    11. Georgios Chortareas & Stephen Miller, 2004. "Optimal Central Banker Contracts and Common Agency," Public Choice, Springer, vol. 121(1), pages 131-155, October.
    12. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    13. Pekarski, Sergey, 2011. "Budget deficits and inflation feedback," Structural Change and Economic Dynamics, Elsevier, vol. 22(1), pages 1-11, February.
    14. Leroy Laney & Thomas Willett, 1983. "Presidential politics, budget deficits, and monetary policy in the United States; 1960–1976," Public Choice, Springer, vol. 40(1), pages 53-69, January.
    15. Fernando Blumenschein, 1995. "The Positive Economics of Inflation in Brazil," Development and Change, International Institute of Social Studies, vol. 26(4), pages 651-686, October.
    16. Salar, Laleena & Zaman, Khalid & Khilji, Bashir Ahmad & Khan, Muhammad Mushtaq & Lodhi, Mohammad Saeed, 2013. "The consequences of revenue gap in Pakistan: Unveiling the reality," Economic Modelling, Elsevier, vol. 30(C), pages 281-294.
    17. Mr. Andrew M. Warner, 2014. "Public Investment as an Engine of Growth," IMF Working Papers 2014/148, International Monetary Fund.
    18. Sébastien Charles & Jonathan Marie, 2021. "How Israel avoided hyperinflation. The success of its 1985 stabilization plan in the light of post-Keynesian theory," Review of International Political Economy, Taylor & Francis Journals, vol. 28(3), pages 528-558, May.
    19. Mijiyawa, Abdoul, 2008. "Inflation and Democracy in Former Extractive Colonies Analysis with a New Instrumental Variable," Proceedings of the German Development Economics Conference, Zurich 2008 28, Verein für Socialpolitik, Research Committee Development Economics.
    20. Cargill, Thomas F. & Parker, Elliott, 2004. "Price deflation and consumption: central bank policy and Japan's economic and financial stagnation," Journal of Asian Economics, Elsevier, vol. 15(3), pages 493-506, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bba:j00001:v:2:y:2023:i:2:p:34-55:d:36. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ramona Wang (email available below). General contact details of provider: https://www.anserpress.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.