IESET.
Hypotheses·monetary·currency_monetisation_consumer_price_effect

Currency monetisation does not mechanically produce proportional consumer-price inflation in high-slack regimes; the US 2008-2019 and Japan 1995-2020 experience demonstrates the decoupling.

SUPPORTEDengine/runs/currency_monetisation_consumer_price_effect

SUPPORTED - USA and Japan both show base/CPI pass-through below 0.20 by regression coefficient and cumulative ratio.

confidence cueThis is a clear pass for the claim as written. It still applies only to this sample, period, and method.

policy briefNeeds review

In ordinary language

In plain terms, this asks whether monetary base shock is actually linked to better or worse cpi inflation from 1995 to 2020.

plain answer

The data clearly moved in the predicted direction. USA and Japan both show base/CPI pass-through below 0.20 by regression coefficient and cumulative ratio.

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 2 country or place units from 1995 to 2020, using a local projections design.

what was measured
What changed
  • Monetary base shock
  • Cb balance sheet pct income
What we checked
  • Cpi inflation
  • Cpi core
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

No evidence packet has been generated yet.

Results

engine/runs/currency_monetisation_consumer_price_effect
1007550250199520082020USAJPN
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show cpi_inflation across 2 sampled countries over 1995–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for currency_monetisation_consumer_price_effect. Published chart will be generated from engine/runs/currency_monetisation_consumer_price_effect/chart_data.json.

Who has skin in the game — schools predicting on this

2 schools 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.

Chicago School Monetarismwins if MIXEDpartial/no-callModern Monetary Theorywins if SUPPORTEDschool supported

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-05-03T10:25:55Z
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.

Currency monetisation does not mechanically produce proportional consumer-price inflation in high-slack regimes; the US 2008-2019 and Japan 1995-2020 experience demonstrates the decoupling.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if both USA 2008-2019 and Japan 1998-2020 have (a) an HAC(12) OLS coefficient of 12-month CPI inflation on 12-month base/balance-sheet growth below 0.20, and (b) cumulative CPI/base pass-through below 0.20. REFUTED if either country has coefficient >=0.50 or cumulative pass-through >=0.50. PARTIAL if only one country clears both support thresholds, or if one country is incomplete while the other clears.

formal test & threshold
test:      Local-projections IRFs of CPI to monetary base shocks h=1..36 months for USA 2008-2019 and JPN 1995-2020; pass-through coefficient <0.2 with p<0.10 across both supports decoupling claim.

Method

Template
local_projections
Clustering
country
Sample
2 countries · 1995 – 2020
Evidence type
associational

Stub-level estimator pin for runnability audit. Local-projections IRFs of CPI to monetary base / central-bank balance-sheet shocks at horizons h = 1..36 months for USA 2008-2019 and JPN 1995-2020. Slack interaction via output gap. Falsification rule and variables block remain to be filled when this stub is promoted from draft.

Data

VariableSourceTransform
cpi_inflation
outcome
fred:CPIAUCSLtier 1
boj:CPItier 1
pct_change_yoy
cpi_core
outcome
fred:CPILFESLtier 1
boj:CPItier 1
pct_change_yoy
monetary_base_shock
treatment
fred:BOGMBASEtier 1
boj:money_stock_m2tier 1
log_diff
cb_balance_sheet_pct_gdp
treatment
fred:WALCLtier 1
fred:JPNASSETStier 1
level_pct_gdp
output_gap
control
oecd:OECD.ECO.MADtier 2
level_pct
unemployment_rate
control
fred:UNRATEtier 1
ilostat:UE_TUNE_SEX_AGE_RTtier 2
level_pct
oil_price
control
imf_pcps:POILBREtier 1
log_diff

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Currency monetisation and CPI pass-through

Verdict: SUPPORTED - USA and Japan both show base/CPI pass-through below 0.20 by regression coefficient and cumulative ratio.

Results

| Country | Period | N | CPI/base coefficient | p-value | Cumulative pass-through | |---|---|---:|---:|---:|---:| | USA | 2008-01-01 to 2019-12-31 | 132 | -0.020 | 0.128 | 0.140 | | JPN | 1998-04-01 to 2020-12-31 | 261 | 0.016 | 0.316 | 0.004 |

Method

For each country, regress 12-month CPI inflation on 12-month monetary-base or central-bank-asset growth with HAC(12) standard errors. The registered support threshold is pass-through below 0.20 on both the regression coefficient and the cumulative CPI/base log-growth ratio.

Strongest opposing argument

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

Notes

Promoted from coverage-gap stub on 2026-05-03. v1 uses a descriptive pass-through test because the generic local-projections runner is underpowered on the two-country monthly panel. USA uses FRED BOGMBASE and CPIAUCSL, 2008-2019. Japan uses FRED JPNASSETS and JPNCPIALLMINMEI, 1998-2020 because the JPN balance-sheet series starts in 1998.

Authored framework. Read the transparency note.