search query: @author Miller, M. / total: 11
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| Author: | Miller, M. Zhang, L. |
| Title: | Hyperinflation and stabilization: Cagan revisited |
| Journal: | Economic Journal
1997 : MAR, VOL. 107:441, p. 441-454 |
| Index terms: | HYPER-INFLATION STABILIZATION RATIONAL EXPECTATIONS |
| Language: | eng |
| Abstract: | Cagan's analysis of hyperinflations is adapted to look at situations where the deficits to be financed by money creation are large and variable but fiscal stabilisation is expected. The impact of various stabilisation policies on real balances and inflation expectations is studied, assuming expectations are rational and deficits follow a geometric Brownian motion until the stabilisation takes place. For a modified form of Cagan's demand function explicit solutions are obtained using Ito's Lemma, calibrated to give numerical estimates of the effects of expected fiscal stabilisation. The same qualitative effects are shown to apply in the case of Cagan's exponential demand function. |
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