Discussion Paper

Published as Journal Article »

No. 2008-9 | April 01, 2008

Bent Nielsen

On the Explosive Nature of Hyper-Inflation Data

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Abstract

Empirical analyses of Cagan’s money demand schedule for hyper-inflation have largely ignored the explosive nature of hyper-inflationary data. It is argued that this contributes to an (i) inability to model the data to the end of the hyper-inflation, and to (ii) discrepancies between “estimated” and “actual” inflation tax. A simple solution to these issues is found by replacing the conventional measure of inflation by the cost of holding money.

Paper submitted to the special issue "Using Econometrics for Assessing Economic Models" edited by Katarina Juselius.

Data Set

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The data set for this article can be found at: http://hdl.handle.net/1902.1/13722

JEL Classification

C32 E41

Cite As

Bent Nielsen (2008). On the Explosive Nature of Hyper-Inflation Data. Economics Discussion Papers, No 2008-9, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2008-9

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