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Political Instability and Inflation Volatility

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  • Mr. Francisco José Veiga
  • Mr. Ari Aisen

Abstract

The purpose of this paper is to empirically determine the causes of worldwide diversity of inflation volatility. We show that higher degrees of political instability, ideological polarization, and political fragmentation are associated with higher inflation volatility.

Suggested Citation

  • Mr. Francisco José Veiga & Mr. Ari Aisen, 2006. "Political Instability and Inflation Volatility," IMF Working Papers 2006/212, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2006/212
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    WP; inflation volatility; fiscal policy; monetary policy; standard deviation;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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