JOURNAL ARTICLE
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Stability Problems in Hyperinflation Models
Ein Kommentar
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.