The Hyperinflation Model of Money Demand Revisited
In this paper we propose a test of the hyperinflation model of money demand, which is valid under any assumption concerning agents' expectations, subject only to the restriction that forecasting errors are stationary. It is also demonstrated that highly efficient estimates of the model can be obtained, and restrictions on them tested, under the same weak assumption. Finally, it is shown of rational expectation. The arguments are illustrated by analysis of the classic data on European hyperflations previously analysed by Cagan (1956), Barro (1970) and Abel, Dornbusch, Huizinga and Marcus (1979).
|Date of creation:||Oct 1990|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:473. 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: ()
If references are entirely missing, you can add them using this form.