Hyperinflation Pitfalls: Fundamentals Versus Bubbles

  • Fernando de Holanda Barbosa
Part of the SpringerBriefs in Economics book series (BRIEFSECONOMICS)


In the set-up of our hyperinflation model, in a joint paper with Sallum (Barbosa et al. 2006, thereafter BCS), we were very careful to avoid some traps that have plagued the literature on hyperinflation. In our model, hyperinflation is caused by fundamentals not by bubbles. We showed that a hyperinflation path would not be a competitive equilibrium outcome if the public deficit to be financed by issuing money were constant.


Budget Constraint Equilibrium Solution Competitive Equilibrium Transversality Condition Money Demand 
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Copyright information

© The Author(s) 2017

Authors and Affiliations

  • Fernando de Holanda Barbosa
    • 1
  1. 1.Getulio Vargas Foundation Graduate School of Economics (EPGE/FGV)Rio de JaneiroBrazil

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