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The relationship between the level and variability of inflation: Theory and evidence
Author(s) -
Demetriades Panikos O.
Publication year - 1989
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.3950040303
Subject(s) - inflation (cosmology) , economics , association (psychology) , econometrics , proposition , empirical evidence , simple (philosophy) , psychology , philosophy , physics , epistemology , theoretical physics , psychotherapist
This paper emphasizes the role played by asymmetric stabilization policies in producing the widely reported positive association between the level and variability of inflation. A simple theoretical model is constructed which shows how asymmetric policies give rise to this association. The empirical findings presented provide support to the proposition that variations in inflation uncertainty are policy‐induced.