IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Decomposition of Inflation and Its Volatility: A Stochastic Approach

Listed author(s):
  • Malliaris, A G
  • Malliaris, Mary E

This paper presents a decomposition of inflation and its volatility. According to the traditional quantity theory of money, the rate of inflation is decomposed into three components: the rate of change in the money supply, plus the rate of change in the velocity of circulation, minus the rate of change in real output. We derive a generalization of this decomposition by postulating that the rate of change of money supply, velocity, and output follow diffusion equations. Using stochastic calculus techniques, two expressions are obtained decomposing inflation and its volatility as a sum of several economically important terms. We also use two sets of U.S. data to illustrate these decompositions with actual numbers. Copyright 1995 by Kluwer Academic Publishers

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Article provided by Springer in its journal Review of Quantitative Finance and Accounting.

Volume (Year): 5 (1995)
Issue (Month): 1 (March)
Pages: 93-103

in new window

Handle: RePEc:kap:rqfnac:v:5:y:1995:i:1:p:93-103
Contact details of provider: Web page:

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:kap:rqfnac:v:5:y:1995:i:1:p:93-103. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

or (Rebekah McClure)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.