Empirical evidence on the stability of the Argentine inflationary process

Abstract

The objective of this study is to carry out an empirical analysis of Cagan's (1956) hyperinflation model in the Argentine inflationary experience between 1978 and 1986. To this end, a theoretical summary of the reference model is presented under the hypothesis of adaptive expectations and based on the developments subsequent to Cagan's presentation, mainly those due to Sargent and Wallace (1973), Dornbusch and Fischer (1985) and Bruno Fischer (1987), to then carry out an empirical analysis aimed at substantiating the adaptive expectations scheme, specifying and estimating a demand for real money balances and obtaining the stability conditions of the model.

JEL classification: E31 ; E41 ; E47 ; E52