IESET.
Hypotheses·monetary·austrian_monetary_expansion_asset_bubble_not_cpi_panel

In a panel of advanced economies 1987-2007, base-money expansion and broad money growth correlate positively with asset-price indices (equity, real estate) but only weakly with headline CPI inflation.

This dissociation — money flowing into asset markets rather than goods-market prices — is the empirical pattern Austrians (Rothbard, Salerno, Shostak) call "asset-price inflation" and use to argue that CPI-targeting central banks systematically miss the welfare- relevant inflation. The pre-registered claim is that the panel-FE coefficient on broad-money growth in an asset-price-index regression is at least 3x the coefficient in a parallel CPI regression over the same window.

INCONCLUSIVEengine/runs/austrian_monetary_expansion_asset_bubble_not_cpi_panel

INCONCLUSIVE_DATA_PENDING — insufficient observations after listwise deletion (21)

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

In plain terms, this asks whether broad money growth yoy is actually linked to better or worse real home price index from 1987 to 2007.

plain answer

This test cannot make a firm call yet. insufficient observations after listwise deletion (21)

why it matters

This matters because monetary claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 12 country or place units from 1987 to 2007, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Broad money growth yoy
  • Base money growth yoy
What we checked
  • Real home price index
  • Real equity price index
  • Cpi inflation yoy
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

5 input datasets, 0 unresolved missing series, provenance status: reproducible hash verified.

Results

engine/runs/austrian_monetary_expansion_asset_bubble_not_cpi_panel
1007550250198719972007USAGBRDEUFRAJPNCANAUS
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show real_home_price_index across 12 sampled countries over 1987–2007.
The shapes above are stylised — none of the lines are real data.
Placeholder for austrian_monetary_expansion_asset_bubble_not_cpi_panel. Published chart will be generated from engine/runs/austrian_monetary_expansion_asset_bubble_not_cpi_panel/chart_data.json.

Who has skin in the game — schools predicting on this

1 school list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if SUPPORTEDpartial/no-call

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:54:08Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

In a panel of advanced economies 1987-2007, base-money expansion and broad money growth correlate positively with asset-price indices (equity, real estate) but only weakly with headline CPI inflation. This dissociation — money flowing into asset markets rather than goods-market prices — is the empirical pattern Austrians (Rothbard, Salerno, Shostak) call "asset-price inflation" and use to argue that CPI-targeting central banks systematically miss the welfare- relevant inflation. The pre-registered claim is that the panel-FE coefficient on broad-money growth in an asset-price-index regression is at least 3x the coefficient in a parallel CPI regression over the same window.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Hypothesis is falsified if the coefficient on broad-money growth in the asset-price regression is not at least 3x the coefficient in the CPI regression at p<0.05, OR if the asset-price coefficient is itself not positive and significant.

formal test & threshold
test:      panel_fe_money_asset_vs_money_cpi_coefficient_ratio
threshold: coefficient(money_growth → asset_price_growth) / coefficient(money_growth → cpi_inflation) >= 3.0 AND coefficient(money_growth → asset_price_growth) > 0 at p<0.05

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
12 countries · 1987 – 2007
Evidence type
associational

Two parallel panel-FE regressions: (1) real asset-price index growth on broad-money growth and controls; (2) CPI inflation on broad-money growth and the same controls. Test compares the two coefficients via Wald test. Mainstream/monetarist priors expect a CPI-link; finding it absent (or weaker than the asset-link) supports the Austrian "asset inflation" framing. Heterodox null is that the money-asset correlation is an artefact of credit-driven asset accumulation, not a money-disequilibrium phenomenon.

Data

VariableSourceTransform
real_home_price_index
outcome
bis:WS_SPPtier 2
log_diff
real_equity_price_index
outcome
shiller:us_home_price_realtier 3
oecd:share_price_indextier 2
log_diff
cpi_inflation_yoy
outcome
world_bank_wdi:FP.CPI.TOTL.ZGtier 2
level
broad_money_growth_yoy
treatment
fred:M2SLtier 1
ecb:BSI.M.U2.Y.V.M30.X.1.U2.2300.Z01.Etier 1
boe:LPMVWYRtier 1
yoy
base_money_growth_yoy
treatment
fred:BOGMBASEtier 1
yoy
real_gdp_growth
control
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
level
short_term_rate
control
bis:WS_CBPOLtier 2
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — austrian_monetary_expansion_asset_bubble_not_cpi_panel

Verdict: INCONCLUSIVE_DATA_PENDING — insufficient observations after listwise deletion (21)

Pre-registration

  • Claim: In a panel of advanced economies 1987-2007, base-money expansion and broad money growth correlate positively with asset-price indices (equity, real estate) but only weakly with headline CPI inflation. This dissociation — money flowing into asset markets rather than goods-market prices — is the empirical pattern Austrians (Rothbard, Salerno, Shostak) call "asset-price inflation" and use to argue that CPI-targeting central banks systematically miss the welfare- relevant inflation. The pre-registered claim is that the panel-FE coefficient on broad-money growth in an asset-price-index regression is at least 3x the coefficient in a parallel CPI regression over the same window.
  • Falsification rule: Hypothesis is falsified if the coefficient on broad-money growth in the asset-price regression is not at least 3x the coefficient in the CPI regression at p<0.05, OR if the asset-price coefficient is itself not positive and significant.
  • Falsification test: panel_fe_money_asset_vs_money_cpi_coefficient_ratio

Estimate

  • Error: insufficient observations after listwise deletion (21)

Variables resolved

  • bis:WS_SPP → real_home_price_index (outcome, publisher=bis, n=2272)
  • shiller:us_home_price_real; oecd:share_price_index → real_equity_price_index (outcome, publisher=shiller, n=134)
  • world_bank_wdi:FP.CPI.TOTL.ZG → cpi_inflation_yoy (outcome, publisher=world_bank_wdi, n=7550)
  • fred:M2SL; ecb:BSI.M.U2.Y.V.M30.X.1.U2.2300.Z01.E; boe:LPMVWYR → broad_money_growth_yoy (treatment, publisher=fred, n=68)
  • fred:BOGMBASE → base_money_growth_yoy (treatment, publisher=fred, n=68)
  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → real_gdp_growth (controls, publisher=world_bank_wdi, n=13897)
  • bis:WS_CBPOL → short_term_rate (controls, publisher=bis, n=2119)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)

Generated by scripts/run_panel_fe.py at 2026-06-29T17:54:08+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Salerno (1987 "True Money Supply"), Rothbard (1963 America's Great Depression), Shostak (2002 "Defining Inflation"). The hypothesis reframes the standard CPI-targeting consensus as a measurement failure: the welfare-relevant inflation is the one the metric fails to see.

Authored framework. Read the transparency note.