Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9732028 | Review of Economic Dynamics | 2005 | 28 Pages |
Abstract
This paper studies the short run correlation of inflation and money growth. We study whether a model of learning does better or worse than a model of rational expectations, and we focus our study on countries of high inflation. We take the money process as an exogenous variable, estimated from the data through a switching regime process. We find that the rational expectations model and the model of learning both offer very good explanations for the joint behavior of money and prices.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Albert Marcet, Juan Pablo Nicolini,