| In that study we analyzed the U.S. inflation rate using the structural vector autoregression (SVAR) and the structural vector error correction models (SVECM) to compare different theories of price level: monetarist theory, unpleasant monetarist arithmetic and the fiscal theory of price level. Our results for the SVAR models favor the monetarist theory, whereas the SVECM indicate the relations given by unpleasant monetarist theory. |
