A nonlinear model of inflation and growth, with a fixed rate of money growth, is developed and its global dynamics analysed. These are compared with the local, linearised dynamics of the model. It is shown that the global dynamics of the model plausibly predict hyperinflationary bubbles, which...

The property of robustness is defined in connection with macroeconomic models. Models involving saddle-point dynamics are shown not to have this property, raising serious methodological difficulties. Examples from economic growth theory and the theory of inflation are discussed. The proposed...