Recurrent hyperinflations and learning

Albert Marcet and Juan Pablo Nicolini

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: This paper uses a model of boundedly rational learning to account for the observations of recurrent hyperinflations in the last decade. We study a standard monetary model where the fully rational expectations assumption is replaced by a formal definition of quasi-rational learning. The model under learning is able to match remarkably well some crucial stylized facts observed during the recurrent hyperinflations experienced by several countries in the 80's. We argue that, despite being a small departure from rational expectations, quasi-rational learning does not preclude falsifiability of the model and it does not violate reasonable rationality requirements.

Keywords: Hyperinflations; convertibility; stabilization plans; quasi-rationality (search for similar items in EconPapers)
JEL-codes: D83 E17 E31 (search for similar items in EconPapers)
Date: 1995-11, Revised 2001-11
New Economics Papers: this item is included in nep-dge, nep-mon and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Recurrent Hyperinflations and Learning (2003)
Working Paper: Recurrent Hyperinflations and Learning (1998)
Working Paper: Recurrent Hyperinflations and Learning (1997)
Working Paper: Recurrent Hyperinflations and Learning (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:244

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