The conquest of South American inflation
By: Thomas Sargent, Noah Williams, and Tao Zha.
Contributors: Williams, Noah; Zha, Tao.; Federal Reserve Bank of Atlanta.
Series: Working paper series / Federal Reserve Bank of Atlanta -- 2006-20; Working paper series (Federal Reserve Bank of Atlanta : Online) -- 2006-20.
Publisher: Federal Reserve Bank of Atlanta
Published: 2006
Place of publication: [Atlanta, Ga.]
Language: eng
Format: Electronic resource
Description: "We infer determinants of Latin American hyperinflations and stabilizations by using the method of  maximum likelihood to estimate a hidden Markov model that potentially assigns roles both to fundamentals in the form of government deficits that are financed by money creation and to destabilizing expectations dynamics that can occasionally divorce inflation from fundamentals. Our maximum likelihood estimates allow us to interpret observed inflation rates in terms of variations in the deficits, sequences of shocks that trigger temporary episodes of expectations driven hyperinflations, and occasional superficial reforms that cut inflation without reforming deficits. Our estimates also allow us to infer the deficit adjustments that seem to have permanently stabilized inflation processes. Our results show how the available inflation, deficit, and other macroeconomic data had left informed economists like Rudiger Dornbusch and Stanley Fischer undecided about the ultimate sources of inflation dynamics."--Federal Reserve Bank of Atlanta web site.
Notes: Title from PDF file as viewed on Nov. 13, 2006

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