Abstract: Recently, economists have examined the monetarist and the expectations-augmented Phillips-curve models of inflation to determine which model is a better predictor of the inflation rate. These studies raise an important question: Does money growth contain information that is useful in predicting the inflation rate? ; Joseph H. Haslag and D'Ann M. Ozment specify a general model of the inflation rate that encompasses both the Phillips-curve and the monetarist models. They find that their general, encompassing model is a better predictor of the inflation rate than either the monetarist model or the expectations-augmented Phillips-curve model of inflation. Furthermore, the authors find that changes in money growth play an important, independent role in predicting the inflation rate.
Publication Year: 1991
Publication Date: 1991-01-01
Language: en
Type: article
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Cited By Count: 5
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