Abstract
We infer determinants of Latin American hyperinflations and stabilizations by using the method of maximum likelihood to estimate a hidden Markov model that assigns roles both to fundamentals in the form of government deficits that are financed by money creation and to destabilizing expectations dynamics that can occasionally divorce inflation from fundamentals. Levels and conditional volatilities of monetized deficits drove most hyperinflations and stabilizations, with
Original language | English (US) |
---|---|
Pages (from-to) | 211-256 |
Number of pages | 46 |
Journal | Journal of Political Economy |
Volume | 117 |
Issue number | 2 |
DOIs | |
State | Published - Apr 2009 |
ASJC Scopus subject areas
- Economics and Econometrics