Identification and Estimation of a Model of Hyperinflation with a Continuum of "Sunspot" Equilibria

Loading...
Thumbnail Image

View/Download File

Persistent link to this item

Statistics
View Statistics

Journal Title

Journal ISSN

Volume Title

Title

Identification and Estimation of a Model of Hyperinflation with a Continuum of "Sunspot" Equilibria

Published Date

1985-09

Publisher

Center for Economic Research, Department of Economics, University of Minnesota

Type

Working Paper

Abstract

This paper constructs a model with two structural equations: the government budget constraint and a linear version of Cagan's portfolio balance equation. the model contains a continuum of equilibria with "sunspot equilibria." Closed forms for the solutions are found. Even though there is a continuum of equilibria, the model is overidentified econometrically, so that the model restricts time series data on price levels and currency stocks. We describe how the free parameters of the model can be estimated, including some parameters that serve to index particular members of the continuum of equilibria. The sunspot equilibria hold out some promise of explaining anomalies in the observed behavior of inflation and real balances during hyperinflations.

Keywords

Description

Related to

Replaces

License

Series/Report Number

Funding information

Isbn identifier

Doi identifier

Previously Published Citation

Sargent, T.J. and Wallace, N., (1985), "Identification and Estimation of a Model of Hyperinflation with a Continuum of "Sunspot" Equilibria", Discussion Paper No. 220, Center for Economic Research, Department of Economics, University of Minnesota.

Suggested citation

Sargent, Thomas J.; Wallace, Neil. (1985). Identification and Estimation of a Model of Hyperinflation with a Continuum of "Sunspot" Equilibria. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/55489.

Content distributed via the University Digital Conservancy may be subject to additional license and use restrictions applied by the depositor. By using these files, users agree to the Terms of Use. Materials in the UDC may contain content that is disturbing and/or harmful. For more information, please see our statement on harmful content in digital repositories.