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[money_inflation_nonlinear] Update spelling
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- change 'stationary inflation rate that assert' to 'stationary inflation rate that asserts'

- change 'it reverse the pervese' to 'it reverses the perverse'

- change 'qualitive' to 'qualitative'.
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longye-tian committed Aug 8, 2024
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6 changes: 3 additions & 3 deletions lectures/money_inflation_nonlinear.md
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Expand Up @@ -35,14 +35,14 @@ As in that lecture, we discussed these topics:
* an **inflation tax** that a government gathers by printing paper or electronic money
* a dynamic **Laffer curve** in the inflation tax rate that has two stationary equilibria
* perverse dynamics under rational expectations in which the system converges to the higher stationary inflation tax rate
* a peculiar comparative stationary-state analysis connected with that stationary inflation rate that assert that inflation can be *reduced* by running *higher* government deficits
* a peculiar comparative stationary-state analysis connected with that stationary inflation rate that asserts that inflation can be *reduced* by running *higher* government deficits

These outcomes will set the stage for the analysis of {doc}`laffer_adaptive` that studies a version of the present model that uses a version of "adaptive expectations" instead of rational expectations.

That lecture will show that

* replacing rational expectations with adaptive expectations leaves the two stationary inflation rates unchanged, but that $\ldots$
* it reverse the pervese dynamics by making the *lower* stationary inflation rate the one to which the system typically converges
* it reverses the perverse dynamics by making the *lower* stationary inflation rate the one to which the system typically converges
* a more plausible comparative dynamic outcome emerges in which now inflation can be *reduced* by running *lower* government deficits

## The model
Expand Down Expand Up @@ -399,7 +399,7 @@ Those dynamics are "perverse" not only in the sense that they imply that the mon
* the figure indicates that inflation can be *reduced* by running *higher* government deficits, i.e., by raising more resources through printing money.
```{note}
The same qualitive outcomes prevail in {doc}`money_inflation` that studies a linear version of the model in this lecture.
The same qualitative outcomes prevail in {doc}`money_inflation` that studies a linear version of the model in this lecture.
```
We discovered that
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