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Precursors of the P-star model

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  • Thomas M. Humphrey

Abstract

The Federal Reserve Board’s P-Star inflation forecasting model predicts changes in inflation from the gap between actual and equilibrium prices. The model has a distinguished history. Quantity theorists from David Hume to Milton Friedman have long used versions of it to explain how money stock changes determine price level changes with a lag.

Suggested Citation

  • Thomas M. Humphrey, 1989. "Precursors of the P-star model," Economic Review, Federal Reserve Bank of Richmond, issue Jul, pages 3-9.
  • Handle: RePEc:fip:fedrer:y:1989:i:jul:p:3-9:n:v.75no.4
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    File URL: https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/rev_frbrich198907.pdf
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    References listed on IDEAS

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    1. Robert L. Hetzel, 1982. "The October 1979 regime of monetary control and the behavior of the money supply in 1980," Economic Review, Federal Reserve Bank of Richmond, issue Jul, pages 3-15.
    2. David L. Mengle, 1986. "The discount window," Economic Review, Federal Reserve Bank of Richmond, issue May, pages 2-10.
    3. Poole, William, 1982. "Federal Reserve Operating Procedures: A Survey and Evaluation of the Historical Record since October 1979," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 14(4), pages 575-596, November.
    4. Goodfriend, Marvin, 1983. "Discount window borrowing, monetary policy, and the post-October 6, 1979 federal reserve operating procedure," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 343-356, September.
    5. Stephen H. Axilrod, 1985. "U.S. monetary policy in recent years: an overview," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jan, pages 14-24.
    6. Marvin Goodfriend & Gary S. Anderson & Anil K. Kashyap & George R. Moore & Richard D. Porter, 1984. "A weekly perfect foresight model of the nonborrowed reserve operating procedure," Working Paper 84-04, Federal Reserve Bank of Richmond.
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    Cited by:

    1. J.M. Groeneveld & K.G. Koedijk & C.J.M. Kool, 1997. "Money, prices and the transition to EMU," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 50(203), pages 481-504.
    2. Robert Darin & Robert L. Hetzel, 1994. "A shift-adjusted M2 indicator for monetary policy," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 25-48.
    3. John A. Tatom, 1990. "The P-star approach to the link between money and prices," Working Papers 1990-008, Federal Reserve Bank of St. Louis.
    4. Scheide, Joachim & Trabandt, Mathias, 2000. "Predicting inflation in Euroland: the Pstar approach," Kiel Working Papers 1019, Kiel Institute for the World Economy (IfW).

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    Keywords

    Forecasting ; Inflation (Finance) ; Prices;

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