This paper uses cointegration and error-correction models to analyze the relative effects of the monetary, labor, and external sectors on Polish inflation from 1990 to 1999. We use a structural system approach in which cointegration relations are used to derive deviations from steady-state levels. The results suggest that the labor and external sectors dominated the determination of Polish inflation during the above period, but their effects on inflation changed in the mid-1990s. During the period 1995-99, the appreciation of the domestic currency contributed to reducing inflation, whereas excessive wage increases prevented inflation from decreasing to a lower level.
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Volume (Year): 46 (2008) Issue (Month): 6 (November) Pages: 60-69 Download reference. The following formats are available: HTML
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