Economic Review

1989

 
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Jul/Aug, 1989

Precursors of the P-Star Model

Thomas M. Humphrey

The Federal Reserve Board's P-Star inflation forecasting model predicts changes in inflation from the gap between actual and equilibrium prices. The model has a distinguished history. Quantity theorists from David Hume to Milton Friedman have long used versions of it to explain how money stock changes determine price level changes with a lag.



Our Research Focus: Monetary History

Topics: Inflation
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