Essentiality of money and money demand in explosive hyperinflation

Alexandre Sokic

No 18, SEEMHN papers from National Bank of Serbia

Abstract: This paper shows firstly that the money-in-the-utility-function model presents exactly the same kind of limitations as the cash-in-advance model for characterizing explosive hyperinflation. These limitations relate to sufficient money essentiality in the sense of Scheinkman (1980). Thereby, this paper contributes to the understanding of the Cagan inflationary finance models failure with perfect foresight. Secondly, the paper provides theoretical support to alternative functional forms of money demand that may be give an alternative to the failure of Cagan based inflationary finance model for the analysis of explosive hyperinflation. Theoretical support is brought to inelastic functional forms of money demand and specifically to the double-log schedule.

Keywords: Monetary Hyperinflation; Inflation Tax; Money Essentiality (search for similar items in EconPapers)
JEL-codes: E31 E41 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2009-03
Note: The paper was presented at the Fourth Annual SEEMHN Conference hosted by the National Bank of Serbia, 27 March 2009 in Belgrade.
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.nbs.rs/documents/publikacije/konferenc ... /SEEMHN_4_Sokic1.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nsb:mhnsee:18

Access Statistics for this paper

More papers in SEEMHN papers from National Bank of Serbia Contact information at EDIRC.
Bibliographic data for series maintained by Marko Miseljic ().