Researcher Tracks US Inflation Trends to Uncover Links with Money Supply and Economic Growth

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(1) Laurence Francis Lacey, Lacey Solutions Ltd, Skerries, County Dublin, Ireland.

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:::tip Editor's Note: This is Part 3 of 7 of a study on how changes in the money supply, economic growth, and savings levels affect inflation. Read the rest below.

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• Abstract and 1 Introduction
• 2. Methods
• 2.1 Statistical Methodology
• 2.2 US Time Series Data
• 2.3 Hyperinflation Model
• 3. Results
• 3.1 Characterisation of Price Inflation
• 3.2 Characterisation of Hyperinflation in the Weimar Republic (1922 to 1923)
• 4. Discussion
• 5. Conclusion, Supplementary materials, Acknowledgements, and References
• Appendix

The sources of the annual US time series data, over the period 2001 to 2019, are: CPI [8], BMS [9] real GDP [10]. The annual savings data are those estimated for American households. These savings data were reported for the years 2001, 2004, 2007, 2010, 2013, 2016, 2019 only [11]. Where required, the annual savings estimates for the years not available were imputed using the regression fit obtained using the available years of data.

\ The time series data, over the time period 2001 to 2019, with 2001 as the reference year (time = 0), were expressed relative to the value given in year 2001. The rate-constant (λ) estimates for each time series, together with the 95% confidence intervals, and coefficients of determination (R2 ) of the regression fits were obtained from a linear regression (intercept = 0) of the natural log-transformed time series data versus time, with time = 0 for the reference year 2001, using Python (version 3.9.2) statsmodels package [12].

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:::info This paper is available on arxiv under CC BY-NC-ND 4.0 DEED license.

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