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Economic history and econometrics: a cautionary note from the hyperinflation front

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  • Richard Burdekin
  • Paul Burkett

Abstract

We seek to add a cautionary note to the growing appetite for quantitative economic history. Our lightning rod is the money demand estimation undertaken by Michael, Nobay and Peel (MNP) (1994) over the last months of Germany's hyperinflation. MNP apply to less than eighteen months of data an econometric technique designed for long-run time series and use a questionably-defined real wage series as an inappropriate proxy for real income. Given the popularity of applying modern time-series methods to hyperinflations, MNPs work provides a timely reminder that there is no substitute for knowing the historical setting and knowing the data.

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  • Richard Burdekin & Paul Burkett, 1998. "Economic history and econometrics: a cautionary note from the hyperinflation front," Applied Economics Letters, Taylor & Francis Journals, vol. 5(4), pages 251-254.
    • Handle: RePEc:taf:apeclt:v:5:y:1998:i:4:p:251-254
    DOI: 10.1080/135048598354924
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    1. Burdekin, Richard C. K. & Burkett, Paul, 1996. "Hyperinflation, the exchange rate and endogenous money: post-World War I Germany revisited," Journal of International Money and Finance, Elsevier, vol. 15(4), pages 599-621, August.
    2. Michael, P & Nobay, A R & Peel, D A, 1994. "The German Hyperinflation and the Demand for Money Revisited," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(1), pages 1-22, February.
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    Cited by:

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    2. Sébastien Charles & Jonathan Marie, 2017. "Bulgaria’s hyperinflation in 1997: transition, banking fragility and foreign exchange," Post-Communist Economies, Taylor & Francis Journals, vol. 29(3), pages 313-335, July.

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