Money and prices in models of bounded rationality in high inflation economies
Money and prices in models of bounded rationality in high inflation economies
Citation
- Review of Economic Dynamics 8 (2005) 452 - 479
Permanent Link
Description
Abstract
This paper studies the short run correlation of inflation and money growth. We study whether a model of learning can do better than a model of rational expectations, 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.Advisor & department
Collections
Full item page