On the Explosive Nature of Hyper-Inflation Data

Bent Nielsen

No 2008-9, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Empirical analyses of Cagan?s money demand schedule for hyper-inflation have largely ignored the explosive nature of hyper-inflationary data. It is argued that this contributes to an (i) inability to model the data to the end of the hyper-inflation, and to (ii) discrepancies between ?estimated? and ?actual? inflation tax. A simple solution to these issues is found by replacing the conventional measure of inflation by the cost of holding money.

Keywords: Cost of holding money; co-explosiveness; co-integration; explosive processes; hyper-inflation (search for similar items in EconPapers)
JEL-codes: C32 E41 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:7210

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