Is Inflation always and Everywhere a Monetary Phenomenon?

Paul De Grauwe and Magdalena Polan

Chapter 14 in Exchange Rates and Global Financial Policies, 2014, pp 357-382 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Using a sample of about 160 countries over the last 30 years, we test for the quantity theory relationship between money and inflation. When analysing the full sample of countries, we find a strong positive relation between long-run inflation and the money growth rate. The relation is not proportional, however. The strong link between inflation and money growth is almost wholly due to the presence of high- (or hyper-) inflation countries in the sample. The relationship between inflation and money growth for low-inflation countries (on average less than 10 percent per annum over the last 30 years) is weak.

Keywords: Exchange Rate; Financial Policies; Turbulence; Exchange Market; Motenary Union; Macroeconomics; Economic Models; Behaviorial Economics; Monetary Integration; Euro; Financial Crisis; European Monetary Policy; Dynamic Stochastic General Equilibriumauthor (search for similar items in EconPapers)
Date: 2014
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Related works:
Working Paper: Is Inflation Always and Everywhere a Monetary Phenomenon? (2001)
Working Paper: Is Inflation Always and Everywhere a Monetary Phenomenon? (2001)
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