Anticipated Inflation, Real Disturbances and Money Demand: The Case if Chinese Hyperinflation, 1946-49

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dc.contributor.authorTallman, Ellis W.
dc.contributor.authorTang, De-paio
dc.contributor.authorWang, Ping
dc.date.accessioned2020-09-13T19:45:50Z
dc.date.available2020-09-13T19:45:50Z
dc.date.issued2001
dc.description.abstractThis paper re-examines the dynamics of hyperinflation extending the standard Cagan framework. In our theoretical model, we allow the relative price of capital goods in units of consumption goods to vary in order to examine interactions between the real and monetary sectors. The theory generates empirically testable implications that suggest expanding the standard Caganian money demand function to include both anticipated inflation and relative price effects in a nonlinear fashion. Employing data from the post-WWII Chinese hyperinflationary episode, the empirical findings suggest that conventional econometric investigations of money demand during hyperinflations overlook important nonlinear interactions between real and monetary activities, and hence, underestimate the true welfare costs of hyperinflation.
dc.description.departmentEconomics
dc.identifier.urihttp://hdl.handle.net/1803/15696
dc.language.isoen_US
dc.publisherVanderbilt Universityen
dc.subject.other
dc.titleAnticipated Inflation, Real Disturbances and Money Demand: The Case if Chinese Hyperinflation, 1946-49
dc.typeWorking Paperen
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