| Popis: |
In a recent issue of this Journal, Hu (1971) presents three related distributed-lag models of the demand for real cash balances during hyperinflation a d applies them to Chinese data covering the period from the autumn of 1945 to the fall of Shanghai in May 1949.1 Like most of us, Hu tends to emphasize the extent to which his results conform to received doctrine and previous empirical findings. Several such similarities are noted by Hu in the discussion of his empirical results and in the conclusion to his paper. Because of the apparent accord between the Chinese hyperinflation a d those analyzed by Cagan (1956), we were struck by an anomaly: the sample value of the reaction index reported by Hu is approximately 0.2, or only about one-half as large as the smallest estimate recorded by Cagan.2 A value as small as this seemed to us to be inconsistent with the severity of the inflation relative to the increase in nominal cash balances |
