Relative prices and inflation: new evidence from different inflationary contexts
AbstractThis paper analyses the relationship between inflation and relative price variability, in the direction of the latter, in two countries with very different inflationary experiences: Argentina and Spain. To address this objective, using disaggregated price indexes (the Wholesale Price Index for Argentina and the Consumer Price Index for Spain), we delimitate different inflationary regimes and compute a set of regressions for each country. Our results suggest evidence in favour of the non-neutrality of inflation (mostly in hyperinflation periods) and do not support either the menu costs or the signal extraction approaches. We also detect significant structural changes in the relationship depending on the inflationary regime.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 38 (2006)
Issue (Month): 16 ()
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Web page: http://www.tandfonline.com/RAEC20
Other versions of this item:
- Carlos Usabiaga. & MarÃa Ãngeles Caraballo & Carlos DabÃºs, 2004. "Relative Prices and Inflation: New Evidence from Different Inflationary Contexts," Econometric Society 2004 Latin American Meetings 338, Econometric Society.
- María Ángeles Caraballo & Carlos Dabús & Carlos Usabiaga, 2004. "Relative Prices and Inflation: New Evidence from Different Inflationary Contexts," Economic Working Papers at Centro de Estudios Andaluces E2004/71, Centro de Estudios Andaluces.
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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