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Inflationary Finance and the Demand for Money in Greece

  1. Journals
  2. Economics, Finance, Business & Management
  3. Credit and Capital Markets – Kredit und Kapital
  4. Vol. 20, Issue 2
  5. pp. 245–257

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Tavlas, G. Inflationary Finance and the Demand for Money in Greece. Credit and Capital Markets – Kredit und Kapital, 20(2), 245-257. https://doi.org/10.3790/ccm.20.2.245
Tavlas, George S. "Inflationary Finance and the Demand for Money in Greece" Credit and Capital Markets – Kredit und Kapital 20.2, 1987, 245-257. https://doi.org/10.3790/ccm.20.2.245
Tavlas, George S. (1987): Inflationary Finance and the Demand for Money in Greece, in: Credit and Capital Markets – Kredit und Kapital, vol. 20, iss. 2, 245-257, [online] https://doi.org/10.3790/ccm.20.2.245
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Inflationary Finance and the Demand for Money in Greece

Tavlas, George S.

Credit and Capital Markets – Kredit und Kapital, Vol. 20 (1987), Iss. 2 : pp. 245–257

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/ccm.20.2.245
Language
Multiple languages
Pages
13

Author Details

George S. Tavlas, Washington

References

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Abstract

Inflationary Finance and the Demand for Money in Greece

This paper estimates the effects of adaptive and rational-price expectations on money demand in Greece. In contrast to the findings of previous studies, which define adaptive price expectations as equal to the current rate of inflation, a modified-Cagan formulation of adaptive-price expectations has been found to be an important determinant of money demand. Stability tests are performed which show that regressions with both price-expectations variables are stable over the estimation period. The results of Granger and Sims causality tests indicate a feedback relation between money creation and inflation. However, the Sims results suggest that causality has run more reliably from money creation to prices. The regression results are used to determine the upper limit on the amount of seigniorage. The determination of maximizing seigniorage suggests that, had the Government not taken measures in 1982 and 1983 to curb money supply growth, Greece was headed into a situation of accelerating inflation

Table of Contents

Section Title Page Action Price
George S. Tavlas: Inflationary Finance and the Demand for Money in Greece 245
I. Introduction 245
II. The Model and Data 247
III. Empirical Findings 248
IV. Money and Prices: Results of Causality Tests 251
V. Implicationf for Inflationary Finance 254
VI. Concluding Remarks 255
References 256
Zusammenfassung: Inflationsfinanzierung und Geldnachfrage in Griechenland 256
Summary: Inflationary Finance and the Demand for Money in Greece 257
Résumé: Finance inflationniste et la demande de monnaie en Grèce 257

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