Inflation, Monetary Regime and the Financial Asset Theory of Money.
Recently, the quantity theory of money has been criticized for not being able to explain the developments of price level and the stabilization ending inflationary processes. Moreover, it has been asserted that the theory considering money just as another financial asset and using the assumptions of rational expectations and efficient markets can better explain such historical episodes. This paper compares the explanatory power of these partly overlapping and conflicting theori es for several historical cases. The quantity theory (taking into acc ount overshooting of exchange rates) fares quite well, though the "f inancial asset theory of money" performs better in special cases. Copyright 1988 by WWZ and Helbing & Lichtenhahn Verlag AG
Year of publication: |
1988
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Authors: | Bernholz, Peter |
Published in: |
Kyklos. - Wiley Blackwell, ISSN 0023-5962. - Vol. 41.1988, 1, p. 5-34
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Publisher: |
Wiley Blackwell |
Saved in:
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