Excess Money Growth and Inflation Dynamics*

Barbara Roffia and Andrea Zaghini ()

International Finance, 2007, vol. 10, issue 3, pages 241-280

Abstract: This paper analyses the short-run impact of periods of strong monetary growth on inflation dynamics for 15 industrialized economies. We find that when robust money growth is accompanied by large increases in stock and house prices and loose credit conditions, the probability of recording an inflationary outburst over a three-year horizon is significantly increased. In contrast, significant money stock expansions that are not associated with sustained credit increases and strong dynamics in other asset prices seem to be less likely to have inflationary consequences and are thus less worrying from a policy perspective. Copyright 2007 Blackwell Publishing Ltd

Date: 2007
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Working Paper: Excess money growth and inflation dynamics (2008)
Working Paper: Excess money growth and inflation dynamics (2007)
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