Can the fiscal theory of the price level explain UK inflation in the 1970s?

Fan, J ORCID: 0000-0003-4447-6580 and Minford, P, 2010. Can the fiscal theory of the price level explain UK inflation in the 1970s? Working Paper. London: Centre for Economic Policy Research.

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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: Working paper
Description: CEPR discussion paper 7630
Creators: Fan, J. and Minford, P.
Publisher: Centre for Economic Policy Research
Place of Publication: London
Date: January 2010
Divisions: Schools > Nottingham Business School
Depositing User: Linda Sullivan
Date Added: 17 Feb 2017 15:55
Last Modified: 09 Jun 2017 14:12
URI: http://irep.ntu.ac.uk/id/eprint/30218

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