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Interwar Inflation, Unexpected Inflation, And Output Growth

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  • Gregor W. Smith

Abstract

Interwar macroeconomic history is a natural place to look for evidence on the correlation between output growth and inflation or unexpected inflation. We apply time-series methods to measure unexpected inflation for more than twenty countries using both retail andwholesale prices. There is a significant, positive correlation between output growth andinflation for the entire period. There is little evidence that this correlation is caused by an underlying role for unexpected inflation. For wholesale price inflation in particular theoutput declines associated with deflations were larger than the output increases associatedwith inflations of the same scale.

Suggested Citation

  • Gregor W. Smith, 2013. "Interwar Inflation, Unexpected Inflation, And Output Growth," Working Paper 1310, Economics Department, Queen's University.
  • Handle: RePEc:qed:wpaper:1310
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    References listed on IDEAS

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    Cited by:

    1. Martin Ellison & Sang Seok Lee & Kevin Hjortshøj O'Rourke, 2020. "The Ends of 30 Big Depressions," NBER Working Papers 27586, National Bureau of Economic Research, Inc.
    2. Liang, Qi & Sun, Wenjia & Li, Wenyu & Yu, Fengyan, 2021. "Media effects matter: Macroeconomic announcements in the gold futures market," Economic Modelling, Elsevier, vol. 96(C), pages 1-12.

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    More about this item

    Keywords

    inflation expectations; interwar period; Great Depression;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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