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Short-Run Price Dynamics in Mexico

Author

Listed:
  • Thomas M Fullerton Jr

    (University of Texas at El Paso)

  • Roberto Tinajero

    (University of Texas at El Paso)

Abstract

A theoretical model of inflationary dynamics is developed for Mexico. Estimation is carried out using ARIMA transfer function analysis. Sample data are for the January 1982 - December 1998 period. Overall econometric characteristics of the model satisfy standard statistical criteria. Results indicate that prices in Mexico respond relatively quickly to money supply, interst rate, wage, and peso/dollar currency market changes.

Suggested Citation

  • Thomas M Fullerton Jr & Roberto Tinajero, 2004. "Short-Run Price Dynamics in Mexico," Macroeconomics 0407027, EconWPA.
  • Handle: RePEc:wpa:wuwpma:0407027 Note: Type of Document - doc; pages: 17
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    References listed on IDEAS

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    2. Arthur J. Rolnick & Warren E. Weber, 1998. "Money, inflation, and output under fiat and commodity standards," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 11-17.
    3. Engsted, Tom, 1993. "Cointegration and Cagan's Model of Hyperinflation under Rational Expectations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(3), pages 350-360, August.
    4. Santiago Herrera, 1985. "Comentarios sobre las relaciones de causalidad entre tasa de cambio y precios," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE, vol. 4(8), pages 131-132, December.
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    6. Li, C.A. & Philippopoulos, A. & Tzavalis, E., 1998. "Inflation and Exchange Rate Regimes in Mexico," Discussion Papers 9801, Exeter University, Department of Economics.
    7. Andrew J. Filardo, 1998. "New evidence on the output cost of fighting inflation," Economic Review, Federal Reserve Bank of Kansas City, issue Q III.
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    10. Thomas M Fullerton Jr & Eiichi Araki, 2004. "New Directions in Latin American Macroeconometrics," Development and Comp Systems 0408002, EconWPA.
    11. Hanson, James A., 1985. "Inflation and imported input prices in some inflationary Latin American economies," Journal of Development Economics, Elsevier, pages 395-410.
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    Citations

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    Cited by:

    1. Thomas Fullerton & Miwa Hattori & Cuauhtémoc Calderón, 2001. "Error correction exchange rate modeling: Evidence for Mexico," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 25(3), pages 358-368, September.
    2. Thomas M. FULLERTON & Miguel MARTINEZ & Wm. Doyle SMITH & Adam WALKE, 2015. "Inflationary Dynamics in Guatemala," Journal of Economics and Political Economy, KSP Journals, vol. 2(4), pages 436-444, December.

    More about this item

    Keywords

    Price Dynamics; Mexico; Times Series Analysis;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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