Hyperinflation Pitfalls: Fundamentals Versus Bubbles

Fernando Barbosa

Chapter Chapter 8 in Exploring the Mechanics of Chronic Inflation and Hyperinflation, 2017, pp 93-95 from Springer

Abstract: Abstract In the set-up of our hyperinflation model, in a joint paper with Sallum (Barbosa et al. 2006, thereafter BCS), we were very careful to avoid some traps that have plagued the literature on hyperinflation. In our model, hyperinflation is caused by fundamentals not by bubbles. We showed that a hyperinflation path would not be a competitive equilibrium outcome if the public deficit to be financed by issuing money were constant.

Keywords: Budget Constraint; Equilibrium Solution; Competitive Equilibrium; Transversality Condition; Money Demand (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spbchp:978-3-319-44512-0_8

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DOI: 10.1007/978-3-319-44512-0_8

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