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Competitive equilibrium hyperinflation under rational expectations

Listed author(s):
  • Fernando Barbosa

    ()

  • Alexandre Cunha
  • Elvia Sallum

This paper shows that a competitive equilibrium model, where a representative agent maximizes welfare, expectations are rational and markets are in equilibrium can account for several hyperinflation stylized facts. The theory is built by combining two hypotheses, namely, a fiscal crisis that requires printing money to finance an increasing public deficit and a predicted change in an unsustainable fiscal regime.

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File URL: http://hdl.handle.net/10.1007/s00199-005-0016-z
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Article provided by Springer & Society for the Advancement of Economic Theory (SAET) in its journal Economic Theory.

Volume (Year): 29 (2006)
Issue (Month): 1 (September)
Pages: 181-195

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Handle: RePEc:spr:joecth:v:29:y:2006:i:1:p:181-195
DOI: 10.1007/s00199-005-0016-z
Contact details of provider: Web page: http://www.springer.com

Web page: http://saet.uiowa.edu/

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Order Information: Web: http://www.springer.com/economics/economic+theory/journal/199/PS2

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