Nominal and Real Disturbances and Money Demand in Chinese Hyperinflation.

This article reexamines the dynamics of hyperinflation by allowing variability in the relative price of capital goods in units of consumption goods that reflects interactions between the real and monetary sectors. The theory generates empirically testable implications that suggest expanding the stan...

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Bibliographic Details
Published in:Economic Inquiry Vol. 41; no. 2; pp. 234 - 250
Main Authors: Tallman, Ellis W., Tang, De-Piao, Wang, Ping
Format: Article
Published: Wiley-Blackwell April 2003
Subjects:
Online Access:View this record in EBSCOhost
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        atl: Nominal and Real Disturbances and Money Demand in Chinese Hyperinflation.
      aug:
        au:
          Tallman, Ellis W.
          Tang, De-Piao
          Wang, Ping
      su:
        Demand for money
        Mathematical models of economics
        Mathematical models of inflation
        Price inflation
        China
      sug:
        subj:
          China
          Demand for money
          Mathematical models of economics
          Mathematical models of inflation
          Price inflation
      keyword: Prices -- China -- History
      ab: This article reexamines the dynamics of hyperinflation by allowing variability in the relative price of capital goods in units of consumption goods that reflects 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-WW II Chinese hyperinflationary episode, the empirical findings suggest that conventional econometric investigations of money demand during hyperinflation overlook important nonlinear interactions between real and monetary activities and, hence, underestimate the welfare costs of hyperinflation. Reprinted by permission of the publisher.
      pubtype: Academic Journal
      doctype: Article
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    language: English
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