Citation

Discussion Paper Details

Please find the details for DP1875 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Recurrent Hyperinflations and Learning

Author(s): Albert Marcet and Juan Pablo Nicolini

Publication Date: May 1998

Keyword(s): Convertibility, Hyperinflations, quasi-rationality and stabilization plans

Programme Area(s): International Macroeconomics

Abstract: This paper uses a model of boundedly rational learning to account for the observations of recurrent hyperinflations in the last decade. We study a standard monetary model, where the full rational expectations assumption is replaced by a formal definition of quasi-rational learning. The model under learning is able to match remarkably well some crucial stylized facts, observed during the recurrent hyperinflations experienced by several countries in the 1980s. We argue that, despite being a small departure from rational expectations, quasi-rational learning does not preclude falsifiability of the model and it does not violate reasonable rationality requirements.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1875

Bibliographic Reference

Marcet, A and Nicolini, J. 1998. 'Recurrent Hyperinflations and Learning'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1875