Global Bifurcations, Credit Rationing and Recurrent Hyperinflations

Àlex Haro and Pedro Gomis-Porqueras

No 239, Working Papers from Barcelona School of Economics

Abstract: This paper proposes an alternative explanation to recurrent hyperinflations other than bounded rationality by explicitly considering the global dynamics of an economy with credit market frictions. In this paper we show that hyperinflations are self-generated and are manifestations of the underlying global dynamic properties of an economy with perfect foresight rational agents that face credit rationing. Moreover, we found that economies that are more credit constrained are more likely to experience recurrent hyperinflations.

Keywords: Nonlinear Dynamical Systems; Global Dynamics (search for similar items in EconPapers)
JEL-codes: E32 E44 (search for similar items in EconPapers)
Date: 2015-09
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Journal Article: Global bifurcations, credit rationing and recurrent hyperinflations (2007)
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