Saturday, May 14, 2016

Exit through the hyperinflation, redux

I realized in going back to my post Exit through the hyperinflation about jumping from the general equilibrium solution to the accelerating inflation solution (hyperinflation) of the information equilibrium conditions as part of this discussion of WWII price controls that the original post used the full monetary base (including reserves).

This approach turned out to be wrong, but I never updated these earlier graphs. So here they are:




I added a year-over-year inflation graph. The major deviations are the WWII price controls and the oil crises in the 1970s.

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Also, try to avoid the use of dollar signs as they interfere with my setup of mathjax. I left it set up that way because I think this is funny for an economics blog. You can use € or £ instead.