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Inflation persistence and exchange rate regimes: evidence from developing countries

Author

Listed:
  • Michael Bleaney

    () (University of Nottingham)

  • Manuela Francisco

    () (University of Minho)

Abstract

Using data for 102 developing countries, it is shown that inflation persistence is particularly low in countries on hard pegs, and particularly high in countries with severe inflationary problems. Inflation persistence is similar under floating and soft pegs. The finding of low inflation persistence in hard pegs is a new result.

Suggested Citation

  • Michael Bleaney & Manuela Francisco, 2005. "Inflation persistence and exchange rate regimes: evidence from developing countries," Economics Bulletin, AccessEcon, vol. 6(2), pages 1-15.
  • Handle: RePEc:ebl:ecbull:eb-04f40009
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    References listed on IDEAS

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    1. Dornbusch, Rudiger, 1982. "PPP Exchange-Rate Rules and Macroeconomic Stability," Journal of Political Economy, University of Chicago Press, vol. 90(1), pages 158-165, February.
    2. Alogoskoufis, George S, 1992. "Monetary Accommodation, Exchange Rate Regimes and Inflation Persistence," Economic Journal, Royal Economic Society, vol. 102(412), pages 461-480, May.
    3. Burdekin, Richard C K & Siklos, Pierre L, 1999. "Exchange Rate Regimes and Shifts in Inflation Persistence: Does Nothing Else Matter?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(2), pages 235-247, May.
    4. Michael Bleaney, 2001. "Exchange Rate Regimes and Inflation Persistence," IMF Staff Papers, Palgrave Macmillan, vol. 47(3), pages 1-5.
    5. Clarida, Richard & Gali, Jordi & Gertler, Mark, 1998. "Monetary policy rules in practice Some international evidence," European Economic Review, Elsevier, vol. 42(6), pages 1033-1067, June.
    6. Robert Anderton, 1997. "Did the underlying behaviour of inflation change in the 1980s? A study of 17 countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(1), pages 22-38, March.
    7. Michael Bleaney & Manuela Francisco, 2005. "Exchange rate regimes and inflation: only hard pegs make a difference," Canadian Journal of Economics, Canadian Economics Association, vol. 38(4), pages 1453-1471, November.
    8. Alogoskoufis, George S & Smith, Ron, 1991. "The Phillips Curve, the Persistence of Inflation, and the Lucas Critique: Evidence from Exchange-Rate Regimes," American Economic Review, American Economic Association, vol. 81(5), pages 1254-1275, December.
    9. Jeff Fuhrer & George Moore, 1995. "Inflation Persistence," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 127-159.
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    Citations

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    Cited by:

    1. Abhijit Sen Gupta, 2008. "Does capital account openness lower inflation?," International Economic Journal, Taylor & Francis Journals, vol. 22(4), pages 471-487.
    2. Jiranyakul, Komain, 2015. "Exchange Rate Regimes and Persistence of Inflation in Thailand," MPRA Paper 66203, University Library of Munich, Germany.
    3. Andrew Phiri, 2016. "Inflation persistence in African countries: Does inflation targeting matter?," Economics and Business Letters, Oviedo University Press, vol. 5(3), pages 65-71.
    4. Giannellis, Nikolaos & Koukouritakis, Minoas, 2013. "Exchange rate misalignment and inflation rate persistence: Evidence from Latin American countries," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 202-218.
    5. Coulibaly, Issiaka & Davis, Junior, 2013. "Exchange rate regimes and economic performance: Does CFA zone membership benefit their economies?," MPRA Paper 54075, University Library of Munich, Germany.
    6. Phiri, Andrew, 2016. "Changes in inflation persistence prior and subsequent to the subprime crisis: What are the implications for South Africa?," MPRA Paper 70645, University Library of Munich, Germany.
    7. Jiranyakul, Komain, 2013. "Exchange Rate Regimes and Persistence of Inflation in Thailand," MPRA Paper 50109, University Library of Munich, Germany.
    8. Evzen Kocenda & Balazs Varga, 2016. "The impact of monetary strategies on inflation persistence," KIER Working Papers 938, Kyoto University, Institute of Economic Research.

    More about this item

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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