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Stability Problems in Hyperinflation Models

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Michaelis, J. Stability Problems in Hyperinflation Models. . Ein Kommentar. Credit and Capital Markets – Kredit und Kapital, 28(3), 368-375. https://doi.org/10.3790/ccm.28.3.368
Michaelis, Jochen "Stability Problems in Hyperinflation Models. Ein Kommentar. " Credit and Capital Markets – Kredit und Kapital 28.3, 1995, 368-375. https://doi.org/10.3790/ccm.28.3.368
Michaelis, Jochen (1995): Stability Problems in Hyperinflation Models, in: Credit and Capital Markets – Kredit und Kapital, vol. 28, iss. 3, 368-375, [online] https://doi.org/10.3790/ccm.28.3.368

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Stability Problems in Hyperinflation Models

Ein Kommentar

Michaelis, Jochen

Credit and Capital Markets – Kredit und Kapital, Vol. 28 (1995), Iss. 3 : pp. 368–375

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Jochen Michaelis, London und Freiburg

Abstract

Stability Problems in Hyperinflation Models - A Comment

The Zink-model endogenises the frequency of wage payments and analyses the implications for the dynamic behaviour of hyperinflation models. This comment shows how a slight modification of the Zink-model eliminates a shortcoming of traditional hyperinflation models: the high inflation equilibrium is stable, and, contrary to the literature, it has ‘correct’ comparative statics, i.e. a higher money financed budget deficit leads to a higher equilibrium inflation rate.