Can the Fiscal Theory of the Price Level explain UK inflation in the 1970s?

Fan, Jingwen and Minford, Patrick 2011. Can the Fiscal Theory of the Price Level explain UK inflation in the 1970s? [Working Paper]. Cardiff Economics Working Papers, Cardiff: Cardiff University.

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Abstract

We investigate whether the Fiscal Theory of the Price Level can explain UK inflation in the 1970s. We find that fiscal policy was non-Ricardian and money growth entirely endogenous in this period. The implied model of inflation is tested in two ways: for its trend using cointegration analysis and for its dynamics using the method of indirect inference. We find that it is not rejected. We also find that the model's errors indicate omitted dynamics which merit further research.

Item Type:	Monograph (Working Paper)
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HB Economic Theory
Publisher:	Cardiff University
Date of First Compliant Deposit:	30 March 2016
Last Modified:	06 Oct 2015 14:51
URI:	https://orca.cardiff.ac.uk/id/eprint/77844

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