Inflation Dynamics in the Dominican Republic
This paper investigates the determinants of inflation in the Dominican Republic during 1991-2002, a period characterized by remarkable macroeconomic stability and growth. By developing a parsimonious and empirically stable error-correction model using quarterly observations, the paper finds that inflation is explained by changes in monetary aggregates, real output, foreign inflation, and the exchange rate. Long-run relationships in the money and traded-goods markets are found to exist, but only the disequilibrium from the money market exerts a significant impact on inflation.
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- Hanson, James A., 1985. "Inflation and imported input prices in some inflationary Latin American economies," Journal of Development Economics, Elsevier, vol. 18(2-3), pages 395-410, August.
- Choudhri, Ehsan U. & Hakura, Dalia S., 2006.
"Exchange rate pass-through to domestic prices: Does the inflationary environment matter?,"
Journal of International Money and Finance,
Elsevier, vol. 25(4), pages 614-639, June.
- Dalia Hakura & Ehsan U. Choudhri, 2001. "Exchange Rate Pass-Through to Domestic Prices; Does the Inflationary Environment Matter?," IMF Working Papers 01/194, International Monetary Fund.
- Taylor, John B., 2000. "Low inflation, pass-through, and the pricing power of firms," European Economic Review, Elsevier, vol. 44(7), pages 1389-1408, June.
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- Atish Ghosh & Holger Wolf, 2001. "Imperfect Exchange Rate Passthrough: Strategic Pricing and Menu Costs," CESifo Working Paper Series 436, CESifo Group Munich.
- Kakkar, Vikas & Ogaki, Masao, 1999. "Real exchange rates and nontradables: A relative price approach," Journal of Empirical Finance, Elsevier, vol. 6(2), pages 193-215, April.
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