Money and inflation in a nonlinear model

Authors:
Donald A. R. George;Les Oxley
Affiliations:
Management School and Economics, University of Edinburgh, George Square, Edinburgh EH8 9JY,UK;Department of Economics, University of Canterbury, Christchurch, New Zealand
Venue:
Mathematics and Computers in Simulation
Year:
2008

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Mathematics and Computers in Simulation

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Abstract

A nonlinear model of inflation and growth, with a fixed rate of money growth, is developed and its global dynamics analysed. These are compared with the local, linearised dynamics of the model. It is shown that the global dynamics of the model plausibly predict hyperinflationary bubbles, which are not present in the linearised version. Numerical simulations of the model are presented.