Monetary indexation and economic stability: A simulation study of the U.S. economy

B. Z. Zilberfarb

Research output: Contribution to journalArticlepeer-review


The purpose of this study is to examine the effect of monetary indexation on the built-in stability of the economic system. The study is based on simulation results from a medium size (28 equation) econometric model of the U.S. economy. The model is close in nature to the Wharton Model, and its equations are summarized in the appendix. (A detailed description of the model is provided in Zilberfarb [1976].) This approach enables us to analyze the dynamic properties of the economic system, in a model which is far more detailed than the usual form of theoretical models. It also provides quantitative (as well as qualitative) results of the various effects of indexation. The First section contains a brief review of the pros and cons of monetary indexation. It is followed by a description of the model's monetary sector with and without indexation. Section three outlines the methodology employed in this study. Section four reports on and analyzes the simulation results. Summary and conclusions are provided in the final section.

Original languageEnglish
Pages (from-to)233-244
Number of pages12
JournalEmpirical Economics
Issue number1
StatePublished - Dec 1980


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