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The Great Inflation Was Not Asymmetric: International Evidence

Authors


  • Christina Romer and David Romer have provided very helpful advice in preparation of this paper. Thanks also to seminar participants at University of California, Berkeley, and the Reserve Bank of New Zealand for their comments, and to the Institute for International Studies, University of California, Berkeley, for financial support.

Abstract

The rise and fall of inflation during the Great Inflation were events of approximately equal duration in developed economies. Relying on data-driven methods, this paper shows the American experience, in which inflation fell more quickly than it rose, was anomalous. This suggests that theories explaining the asymmetry in the American data may not be so applicable to a broader sample of countries.

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