Inflation and Monetary Regimes Articles uri icon

authors

  • DWYER JR. ., GERALD P.
  • FISHER, MARK

publication date

  • November 2009

start page

  • 1221

end page

  • 1241

issue

  • 7

volume

  • 28

International Standard Serial Number (ISSN)

  • 0261-5606

Electronic International Standard Serial Number (EISSN)

  • 1873-0639

abstract

  • Correlations of inflation with the growth rate of money increase when data are averaged over longer time periods. Correlations of inflation with the growth of money also are higher when high inflation as well as low-inflation countries are included in the analysis. We show that serial correlation in the underlying inflation rate ties these two observations together and explains them. We present evidence that averaging increases the correlation of inflation and money growth in more when the underlying inflation rate has higher serial correlation.