Relative Prices and Inflation: New Evidence from Different Inflationary Contexts
AbstractThis paper carries out a comparative analysis of the inflation effects on relative price variability (RPV) in two economies with a inflationary experiences clearly different: Argentina and Spain. The results indicate non-neutrality of inflation, particularly in extreme inflation. The main determinants of RPV are the inflation rate, its variability, and unexpected inflation. Hence, our results neither supports the â€œmenu-costâ€ approach -there are not monetary rigidities in high inflation-, nor the signal â€œextractionâ€ approach, although the latter seems to be suitable for the Spanish case. In turn, we found significant structural changes in this relation in both countries, which suggest that the Inflation-RPV relation is different among different inflationary regimes
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Bibliographic InfoPaper provided by Econometric Society in its series Econometric Society 2004 Latin American Meetings with number 338.
Date of creation: 11 Aug 2004
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Inflationary regimes; Argentina; Spain;
Other versions of this item:
- M. Angeles Caraballo & Carlos Dabus & Carlos Usabiaga, 2006. "Relative prices and inflation: new evidence from different inflationary contexts," Applied Economics, Taylor & Francis Journals, vol. 38(16), pages 1931-1944.
- 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.
- E0 - Macroeconomics and Monetary Economics - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-30 (All new papers)
- NEP-CBA-2004-10-30 (Central Banking)
- NEP-MAC-2004-10-30 (Macroeconomics)
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