The Short-Run Relation Between Growth and Inflation in Latin America: A Quasi Rational or Consistent Expectations Approach

Abstract

The purpose of this paper is to explore the short-run relation between inflation and growth in Latin America. This topic was the subject of heated debate between "structuralists" and monetarists in the 1960's but has only begun to explored empirically. The evidence presented here also should provide a useful complement to the numerous studies of the relation between output and employment and inflation in developed countries, for Latin America provides a far broader set of well-documented "experiments" wich which to test hypothesis regarding inflation than the Group of Ten.