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Inflation Dynamics In Latin America

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  • CARLOS CAPISTRÁN
  • MANUEL RAMOS-FRANCIA

Abstract

"This article studies the mean and the persistence of inflation in the 10 largest Latin American countries for the period 1980-2007. We find multiple shifts in the mean, with inflation in the region increasing throughout the eighties and decreasing in the nineties, thus documenting that the rise and fall of inflation in Latin America occurred a decade later than in industrial countries. Regarding the persistence, we find that it is high but that it decreases when the shifts in the mean are taken into account, as in developed countries, while it appears to have decreased recently in more than half of the countries in our sample. Finally, we find that only about a third of the total variation of inflation in Latin America can be explained by a common factor and, therefore, that most of the variation in the region has been related to idiosyncratic factors. We discuss the relation of our findings with economic policies implemented in the region". ("JEL "E31, E42, C22) Copyright (c) 2009 Western Economic Association International.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1465-7287.2008.00128.x
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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 27 (2009)
Issue (Month): 3 (07)
Pages: 349-362

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Handle: RePEc:bla:coecpo:v:27:y:2009:i:3:p:349-362

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References

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  19. Manuel Ramos Francia & Alberto Torres García, 2006. "Inflation Dynamics in Mexico: A Characterization Using the New Phillips Curve," Working Papers 2006-15, Banco de México.
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Citations

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Cited by:
  1. Kenji Moriyama, 2011. "Inflation Inertia in Egypt and its Policy Implications," IMF Working Papers 11/160, International Monetary Fund.
  2. Laura D´Amato & Lorena Garegnani & Juan M. Sotes Paladino, 2007. "Inflation Persistence and Changes in the Monetary Regime: The Argentine Case," BCRA Working Paper Series 200723, Central Bank of Argentina, Economic Research Department.
  3. Leonardo Vera, 2013. "Structural Inflation Redux," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(69), pages 37-99, December.
  4. Carla Ysusi, 2009. "Analysis of the Dynamics of Mexican Inflation Using Wavelets," Working Papers 2009-09, Banco de México.
  5. Antonio E. Noriega & Manuel Ramos Francia, 2009. "On the dynamics of inflation persistence around the world," Working Papers 2009-02, Banco de México.
  6. Guillermo Benavides, 2010. "Forecasting Short-Run Inflation Volatility using Futures Prices: An Empirical Analysis from a Value at Risk Perspective," Working Papers 2010-12, Banco de México.
  7. Carmen Broto, 2008. "Inflation targeting in Latin America: Empirical analysis using GARCH models," Banco de Espa�a Working Papers 0826, Banco de Espa�a.
  8. Daniel Chiquiar & Antonio Noriega & Manuel Ramos-Francia, 2010. "A time-series approach to test a change in inflation persistence: the Mexican experience," Applied Economics, Taylor & Francis Journals, vol. 42(24), pages 3067-3075.
  9. Manuel Ramos Francia & Alberto Torres García, 2006. "Inflation Dynamics in Mexico: A Characterization Using the New Phillips Curve," Working Papers 2006-15, Banco de México.
  10. Carlos A. Carrasco & Jesús Ferreiro, 2011. "Inflation Targeting and Economic Performance: The Case of Mexico," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(5), pages 675-692, December.
  11. Carrasco, Carlos A., 2013. "El Nuevo Consenso Macroeconómico y la mediocridad del crecimiento económico en México
    [New Consensus Macroeconomics and the mediocrity of economic growth in Mexico]
    ," MPRA Paper 53391, University Library of Munich, Germany.
  12. Andrés Gonzalez & Franz Hamann, 2011. "Lack of Credibility, Inflation Persistence and Disinflation in Colombia," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE.
  13. José Julián Sidaoui & Carlos Capistrán & Daniel Chiquiar & Manuel Ramos Francia, 2009. "A Note on the Predictive Content of PPI over CPI Inflation: The Case of Mexico," Working Papers 2009-14, Banco de México.
  14. Ramos-Francia, Manuel & Torres, Alberto, 2008. "Inflation dynamics in Mexico: A characterization using the New Phillips curve," The North American Journal of Economics and Finance, Elsevier, vol. 19(3), pages 274-289, December.

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