Economics: The Open-Access, Open Assessment E-Journal http://www.economics-ejournal.org en Bent Nielsen On the Explosive Nature of Hyper-Inflation Data 2008-04-01 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. Dataset (zip file, 2.9kb) http://www.economics-ejournal.org/economics/discussionpapers/2008-9 JEL C32 JEL E41