Inflation Dynamics in the Dominican Republic

Abstract

This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper investigates the determinants of inflation in the Dominican Republic during 1991-2002, a period characterized by remarkable macroeconomic stability and growth. By developing a parsimonious and empirically stable error-correction model using quarterly observations, the paper finds that inflation is explained by changes in monetary aggregates, real output, foreign inflation, and the exchange rate. Long-run relationships in the money and traded-goods markets are found to exist, but only the disequilibrium from the money market exerts a significant impact on inflation. JEL Classification Numbers: E5, F41

Money demand and inflation in dollarized economies: The case of Russia

“…Nikolić (2000) finds no stable linear relationship between ruble broad money or overall broad money, including foreign currency deposits, and inflation for the period from 1994 to 1998, which suggests that inflation was no longer a monetary phenomenon in the second half of the 1990s. 9 Such a two-stage approach is commonly used for developing countries with time series data that are of limited length and that tend to be subject to significant measurement errors, as Kuijs (2002), Sacerdoti and Xiao (2001) and Williams and Adedeji (2004) exemplify. Although we would prefer to estimate the two long-run equations simultaneously from one VAR, we find this difficult due to the short time series of limited quality data that are subject to structural breaks.…”

Impact of Inflation and Unemployment on Economic Growth in Ten (10) Selected Member's States of Economic Community of West Africa States (ECOWAS) (2001-2014)

“…Ghanaian econometric Model The above equation (23) shows that a unit increase on unemployment rate would bring about 0.59 increase in inflation rate in the short-run when there is tradeoff but in the long-run when tradeoff disappearance, a unit increase on unemployment rate 3.9.7. Guinea Bissau econometric Model (24) shows that a unit increase on economic growth proxies by (GDP) in the previous year causes prices of the goods and services to increase by0.987. The above equation (26) shows that a unit increase on unemployment rate would bring about -0.003 decrease in inflation rate in the short-run when there is tradeoff but in the long-run when tradeoff disappearance, a unit increase on unemployment rate 3.9.8.…”

Russian Federation: Selected Issues

“…16 The "paid services" component of the CPI include public transportation, housing, telephone subscription, electricity, water, sewage, and gas. 17 Although this approach has been used in the literature, the difficulty of it is that services inflation is a subset of CPI inflation, which would lead to perfect collinearity if the weight of services in the CPI was 13 Such a two-stage approach is commonly used for developing countries with time series data that are of limited length and that tend to be subject to significant measurement errors (e.g., Kuijs, 2002;Sacerdoti and Xiao, 2001;Williams and Adedeji, 2004). While it would obviously be preferable to estimate the two long-run equations simultaneously from one VAR, this tends to be very difficult with short time series data of limited quality that are subject to structural breaks.…”