IDEAS home Printed from https://ideas.repec.org/a/taf/apfiec/v13y2003i4p237-243.html
   My bibliography  Save this article

Is US inflation low because the dollar value is high? Some short- and long run evidence

Author

Listed:
  • A. F. Darrat
  • M. C. Chopin
  • C. Topuz

Abstract

Since its inception in the mid-1970s, the floating exchange rate regime has been associated with large fluctuations in the values of foreign currencies. Many analysts have studied the implied interrelationship between the dollar's exchange value and US inflation and reported mixed evidence. Several reasons are suggested for the apparently conflicting results and the dollar/US inflation nexus with monthly data covering the floating period is reexamined. The results from multivariate cointegration and error-correction models indicate that the dollar's exchange rate is an important causal variable for US inflation, both in the short and in the long run. The results also imply that the Federal Reserve has been quite successful in maintaining a low inflationary environment despite the recent large fluctuations in the dollar's exchange rate.

Suggested Citation

  • A. F. Darrat & M. C. Chopin & C. Topuz, 2003. "Is US inflation low because the dollar value is high? Some short- and long run evidence," Applied Financial Economics, Taylor & Francis Journals, vol. 13(4), pages 237-243.
    • Handle: RePEc:taf:apfiec:v:13:y:2003:i:4:p:237-243
    DOI: 10.1080/09603100110108136
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/09603100110108136
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09603100110108136?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. James E. Glassman, 1985. "The influence of exchange rate movements on inflation in the United States," Working Paper Series / Economic Activity Section 46, Board of Governors of the Federal Reserve System (U.S.).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adhikari, Deergha Raj & Rao, S.P. Uma & Boudreaux, Denis, 2024. "Can a Strong Dollar Lower Inflation?," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 77(3), pages 327-336.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ali F. Darrat & Marc C. Chopin & Ross N. Dickens, 2001. "The Dollar and U.S. Inflation: Some Evidence from a Vecm Process," The American Economist, Sage Publications, vol. 45(2), pages 3-12, October.
    2. Arnold Kling, 1985. "Simulating exchange rate shocks in the MPS and MCM models : an evaluation," International Finance Discussion Papers 260, Board of Governors of the Federal Reserve System (U.S.).
    3. Ki-Ho Kim, 1998. "US inflation and the dollar exchange rate: a vector error correction model," Applied Economics, Taylor & Francis Journals, vol. 30(5), pages 613-619.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apfiec:v:13:y:2003:i:4:p:237-243. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAFE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.