Convergence of inflation with a common cycle: estimating and modelling Spanish historical inflation from the 16th to the 18th centuries
| Autor: | Cecilia Font de Villanueva, José Luis Cendejas Bueno |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2014 |
| Předmět: |
Statistics and Probability
Inflation Economics and Econometrics Convergence of inflation Common cyclical factor Inflation targeting media_common.quotation_subject Keynesian economics Monetary policy Convergence (economics) Mathematics (miscellaneous) Purchasing power parity Price index Price revolution Hamilton's price series Economics Real interest rate Social Sciences (miscellaneous) Unobserved component models media_common |
| Zdroj: | DDFV. Repositorio Institucional de la Universidad Francisco de Vitoria instname DDFV: Repositorio Institucional de la Universidad Francisco de Vitoria Universidad Francisco de Vitoria |
| Popis: | The aim of this paper is twofold. First, to obtain inflation rates for the four regions of Spain analysed for the period 1501–1800 by modelling Hamilton’s (American treasure and the price revolution in Spain, 1934; War and prices in Spain, 1947) price index series by means of an unobserved component model with a common cyclical factor. And second, to prove their long-term convergence process. Therefore, convergence concerns both the cyclical variation of inflation rates common to the four regions, and trend inflation. A complete convergence of the trend inflation occurred once the monetary reforms of Charles II of Spain were introduced in order to redress the previous monetary instability known as inflation of the vellon. The predominance of the vellon in small change and the concentration of the influx of silver when inflation was comparatively lower (second half of the sixteenth century and the seventeenth century) complicate to reach simple conclusions on the monetary origin of inflation exclusively based on precious metals, but, on the contrary, suggest a monetary origin based on copper coin and fiscal distortions. So, monetary stability proved to be a necessary condition for inflation convergence and the fulfilment of the purchasing power parity condition along the eighteen century. |
| Databáze: | OpenAIRE |
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