Accounting for the Variability of Time Lags While Forecasting Inflation on the Basis of Money-Supply Dynamics

Since the dynamics of inflation are influenced by a multitude of multidirectional processes, at present it is technologically impossible to build an uncontradictory model of it that adequately describes the interaction of all factors on the basis of reliable statistical information. In particular, even using the simplest Fisher equation, neither the circulation rate of the money supply nor the volume of goods, the circulation of which it serves, can be calculated with satisfactory precision (because the realization of a considerable part of themâaccording to some estimates as much as 44 percent of total commodity turnoverâis not officially recorded in order to evade taxes).