Interwar Inflation,Unexpected Inflation,and Output Growth |
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| Authors: | BILL DORVAL GREGOR W SMITH |
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| Abstract: | Interwar macroeconomic history is a natural place to look for evidence on the correlation between output growth and inflation or unexpected inflation. We apply time‐series methods to measure unexpected inflation for more than 20 countries using both retail and wholesale prices. There is a significant, positive correlation between output growth and inflation for the entire period. There is little evidence that this correlation is caused by an underlying role for unexpected inflation. For wholesale price inflation in particular, the output declines associated with deflations were larger than the output increases associated with inflations of the same scale. |
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| Keywords: | E31 E37 N10 inflation expectations interwar period Great Depression |
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