Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5099278 | Journal of Economic Dynamics and Control | 2007 | 19 Pages |
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 find that economies that are more credit constrained are more likely to experience recurrent hyperinflations.
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Pere Gomis-Porqueras, Ãlex Haro,