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).
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