IDEAS home Printed from https://ideas.repec.org/a/anp/econom/v16y20152145_156.html
   My bibliography  Save this article

Bubble, weak and strong hyperinflation: Theory and empirical evidence

Author

Listed:
  • Fernando de Holanda Barbosa

    (Getulio Vargas Foundation, Brazi)

  • Tito Nícias Teixeira da Silva Filho

    (Central Bank of Brazil, Brazil)

Abstract

This paper presents a theoretical framework that allows a taxonomy of hyperinflation, namely: (i) bubble, (ii) weak and (iii) strong hyperinflation. The inflation tax revenue curve is used to characterize each type of hyperinflation and we use this curve to test them. The bubble and strong hyperinflation hypotheses are rejected using Brazilian data. The weak hyperinflation hypothesis is not rejected and the economy could have been on the ‘wrong’ side of the Laffer curve during hyperinflation. This outcome, contrary to conventional wisdom, is predicted by this hypothesis, which presents a solution to an old puzzle of the hyperinflation literature.

Suggested Citation

  • Fernando de Holanda Barbosa & Tito Nícias Teixeira da Silva Filho, 2015. "Bubble, weak and strong hyperinflation: Theory and empirical evidence," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 16(2), pages 145-156.
    • Handle: RePEc:anp:econom:v:16:y:2015:2:145_156
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/journal/15177580/16/2
    Download Restriction: no
    File URL: http://ac.els-cdn.com/S1517758015000156/1-s2.0-S1517758015000156-main.pdf?_tid=ad075da4-7d76-11e5-98b6-00000aab0f26&acdnat=1446038616_3209b37601f841941768b55466616323
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Butt, Muhammad Danial & Ahmed, Mumtaz, 2019. "Testing for Multiple Bubbles in Inflation for Pakistan," MPRA Paper 96847, University Library of Munich, Germany.
    2. Butt, Muhammad Danial & Ahmed, Mumtaz, 2019. "Testing for Multiple Bubbles in Inflation for Pakistan," MPRA Paper 96705, University Library of Munich, Germany.

    More about this item

    Keywords

    Hyperinflation; Fiscal crisis; Intertemporal budget constraint; Inflation tax revenue;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anp:econom:v:16:y:2015:2:145_156. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rodrigo Zadra Armond (email available below). General contact details of provider: https://edirc.repec.org/data/anpecea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.