IDEAS home Printed from https://ideas.repec.org/a/ecj/econjl/v100y1990i403p1245-60.html
   My bibliography  Save this article

The Dynamics of Inflation with Constant Deficit under Expected Regime Change

Author

Listed:
  • Bental, Benjamin
  • Eckstein, Zvi

Abstract

A model that describes the dynamics of inflation with a fully anticipated stabilization program is developed. It is shown that with a constant deficit, an economy tends to stay at the neighborhood of the lower of the two state inflation rates that are compatible with the deficit. Further, increasing inflation rates prior to the stabilization are compatible only with deficits that are lower than the maximal feasible staedy- state deficits, and with a stabilization program that reduces the demand for real balances. If these conditions are not met, inflation decreases towards the stabilization date. It is argued that the data generated by actual inflationary episodes fit the conditions described above and corroborate the model.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Bental, Benjamin & Eckstein, Zvi, 1990. "The Dynamics of Inflation with Constant Deficit under Expected Regime Change," Economic Journal, Royal Economic Society, vol. 100(403), pages 1245-1260, December.
    • Handle: RePEc:ecj:econjl:v:100:y:1990:i:403:p:1245-60
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0013-0133%28199012%29100%3A403%3C1245%3ATDOIWC%3E2.0.CO%3B2-V&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

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


    Cited by:

    1. Gomis-Porqueras, Pere & Haro, Alex, 2007. "Global bifurcations, credit rationing and recurrent hyperinflations," Journal of Economic Dynamics and Control, Elsevier, vol. 31(2), pages 473-491, February.
    2. Thomas Sargent & Joseph Zeira, 2011. "Israel 1983: A bout of unpleasant monetarist arithmetic?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(3), pages 419-431, July.
    3. Eckstein, Zvi & Leiderman, Leonardo, 1992. "Seigniorage and the welfare cost of inflation: Evidence from an intertemporal model of money and consumption," Journal of Monetary Economics, Elsevier, vol. 29(3), pages 389-410, June.
    4. Oscar J. Arce, 2006. "Speculative Hyperinflations: When Can We Rule Them Out?," Computing in Economics and Finance 2006 376, Society for Computational Economics.
    5. Arce, Oscar J., 2009. "Speculative hyperinflations and currency substitution," Journal of Economic Dynamics and Control, Elsevier, vol. 33(10), pages 1808-1823, October.
    6. Emanuel Barnea & Nissan Liviatan, 2008. "The chronic inflation process: a model and evidence from Brazil and Israel," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 11(2), pages 151-162.

    More about this item

    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:ecj:econjl:v:100:y:1990:i:403:p:1245-60. 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: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.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.