Price Variability Under Price Level Stability—A Study of Sierra Leone's Price Dynamics Using Micro-Level Price Data
AbstractThis paper offers a unique insight into price dynamics and pricing behavior in Sierra Leone. It examines micro-level price data during a period when the price level remained constant while relative prices displayed considerable volatility. We find that the key factors to explain differences in the average frequency of price changes are inflation volatility and product diversification. Inflation inertia is not significant empirically, except during an earlier period. We show that the variability of relative prices is largely due to a few items that are weighted heavily in the consumer price index. The empirical evidence further suggests that producers in Sierra Leone are more likely to adjust their prices in response to events rather than at fixed intervals. Inflation volatility has also weakened monetary policy effectiveness in Sierra Leone, which could be remedied by introducing a core inflation measure that would exclude volatile product prices. IMF Staff Papers (2007) 54, 701–726. doi:10.1057/palgrave.imfsp.9450021
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Palgrave Macmillan in its journal IMF Staff Papers.
Volume (Year): 54 (2007)
Issue (Month): 4 (November)
Contact details of provider:
Web page: http://www.palgrave-journals.com/
Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Gale).
If references are entirely missing, you can add them using this form.