A Historical Evaluation of Inflation Dynamics and the Role of Inflation Expectations
We employ a VAR-model to study the dynamics of inflation and the role of inflation expectations and other macro economic variables to the inflation process with annual data over the period 1880-2005 in Denmark, France, Germany, Italy, Sweden, The UK and The US. We divide the period into four sub-periods following the Lucas critique (1976). The periods under examination are: 1880-1913, 1914-1939, 1