The development of industrial producer prices is commonly observed as one of the important leading indicators of consumer price inflation. Nevertheless, there was no apparent relationship between total inflation and producer prices in the Czech Republic from 1993 to 1997. This paper is an attempt to find a possible explanation of the above mentioned paradox using statistical and econometric analyses. The main idea is that the prices of industrial producers do not have a straightforward relationship to the development of prices in the entire consumer goods basket, but only to its particular subset. Indeed, the performed correlation and regression analyses did show a relation between producer prices and the corrected inflation (with a lag of 3 to 5 months), i.e. inflation net of changes in regulated prices and food prices. As a by-product, the paper also provides some support for the importance of money supply M2 and the nominal exchange rate as explanatory variables of inflation.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Article provided by University of Economics, Prague in its journal Politická ekonomie.
Order Information: Postal: Redakce Politické ekonomie, Vysoká škola ekonomická, nám. W. Churchilla 4, 130 67 Praha 3 Email: Web: http://www.vse.cz/polek/
For technical questions regarding this item, or to correct its listing, contact: (Vaclav Subrta).