Rational and Adaptive Expectations in the Present Value Model of Hyperinflation

Rational and Adaptive Expectations in the Present Value Model of Hyperinflation

We apply Chow's (1989) technique to the present value model of hyperinflation under rational and adaptive expectation hypotheses. We use the monthly data on price and money supply of Germany (1921:5-1923:8), Hungary (1921:10-1924:2) and Poland (1922:1-1924:1). Our test results show that the Ger...

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Veröffentlicht in:The review of economics and statistics 1993-08, Vol.75 (3), p.511-514
Hauptverfasser: Beladi, Hamid, Munit A. S. Choudhary, Parai, Amar K.
Format: Artikel
Sprache:eng
Schlagworte:
Chow, Gregory C
Coefficients
Economic bubbles
Economic expectations
Economic models
Hyperinflation
Hypotheses
Inflation
Instrumental variables estimation
Monetary theory
Money supply
Present value
Price levels
Prices
Rational expectations
Rational expectations theory
Statistical analysis
Studies
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Zusammenfassung:We apply Chow's (1989) technique to the present value model of hyperinflation under rational and adaptive expectation hypotheses. We use the monthly data on price and money supply of Germany (1921:5-1923:8), Hungary (1921:10-1924:2) and Poland (1922:1-1924:1). Our test results show that the German data are consistent with the adaptive expectations hypothesis and the Hungarian data are consistent with the rational expectations hypothesis. The Polish data, however, do not support either of the two hypotheses.
ISSN:0034-6535
1530-9142
DOI:10.2307/2109466