1997
DOI: 10.1111/1468-0297.00169
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Hyperinflation and Stabilisation: Cagan Revisited

Abstract: Using a variant of the Cagan model with rational expectations, this paper shows that expected stabilisation can result in a budget deficit in excess of the maximum inflation tax. A cap on the deficit dampens inflation expectations and raises real balances thus increasing the yield of the inflation tax for any given rate of inflation. This study extends the work of Drazen and Helpman () by including a stochastic budgetary process and using option pricing theory. It uses parameter values of the semi-elastici… Show more

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Cited by 209 publications
(306 citation statements)
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“…Broad iron line profiles have been seen in these accreting systems that harbor a black hole (e.g., Fabian et al 1989;Miller 2007;Reis et al 2008Reis et al , 2009a or a neutron star (NS; e.g., Bhattacharyya & Strohmayer 2007;Cackett et al 2008Cackett et al , 2009Cackett et al , 2010Papitto et al 2008;di Salvo et al 2009;Egron et al 2013;Miller et al 2013) as the primary accreting compact object. The asymmetrically, broadened profile of the Fe a K line gives a direct measure of the position of the inner disk since the effects of gravitational redshift and Doppler redshift/boosting on the emission line become stronger closer to the compact object (Fabian et al 1989).…”
Section: Introductionmentioning
confidence: 99%
“…Broad iron line profiles have been seen in these accreting systems that harbor a black hole (e.g., Fabian et al 1989;Miller 2007;Reis et al 2008Reis et al , 2009a or a neutron star (NS; e.g., Bhattacharyya & Strohmayer 2007;Cackett et al 2008Cackett et al , 2009Cackett et al , 2010Papitto et al 2008;di Salvo et al 2009;Egron et al 2013;Miller et al 2013) as the primary accreting compact object. The asymmetrically, broadened profile of the Fe a K line gives a direct measure of the position of the inner disk since the effects of gravitational redshift and Doppler redshift/boosting on the emission line become stronger closer to the compact object (Fabian et al 1989).…”
Section: Introductionmentioning
confidence: 99%
“…If the compact object is a black hole (BH), modelling of the Fe line profile in the discdominated spectral state provides an estimate of the BH spin (see e.g. Miller 2007;Reynolds & Fabian 2008), assuming that the disc is truncated at the innermost stable circular orbit (ISCO). In case of a neutron star (NS), a measurement of the inner edge of the disc sets directly an upper limit on the NS radius, as the inner disc radius has to be larger than, or equal to, the equatorial radius of the star (see e.g.…”
Section: Introductionmentioning
confidence: 99%
“…A prominent spectral feature, which is believed to originate when hard Xray photons are reflected from the inner part of the geometrically thin accretion disc around a black hole, is an Fe Kα broad emission line near 6.4 keV. Such a line is broadened and skewed by the Doppler and relativistic effects, and hence is a useful tool to measure the black hole spin (Miller (2007) and references therein). The quasi-periodic oscillations (QPOs) of the X-ray intensity in a frequency range spanning several orders of magnitude are also observed from accreting black holes.…”
Section: Introductionmentioning
confidence: 99%