Inflation and Monetary Regimes

Federal Reserve Bank of Atlanta Working Paper Series No. 2009-26

43 Pages Posted: 1 Oct 2009  

Gerald P. Dwyer

Clemson University; Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA)

Mark Fisher

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Date Written: September 1, 2009

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 more when the underlying inflation rate has higher serial correlation.

Keywords: money and inflation, inflation, quantity theory

JEL Classification: E31, E5

Suggested Citation

Dwyer, Gerald P. and Fisher, Mark, Inflation and Monetary Regimes (September 1, 2009). Federal Reserve Bank of Atlanta Working Paper Series No. 2009-26. Available at SSRN: https://ssrn.com/abstract=1480896 or http://dx.doi.org/10.2139/ssrn.1480896

Gerald P. Dwyer (Contact Author)

Clemson University ( email )

Department of Economics
Clemson University
Clemson, SC 29634
United States

Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA) ( email )

ANU College of Business and Economics
Canberra, Australian Capital Territory 0200
Australia

Mark Emery Fisher

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Research Department
Atlanta, GA 30309-4470
United States
404-521-8757 (Phone)
404-521-8810 (Fax)

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