The Nonmonetary Determinants of Inflation: A Panel Data Study
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper explains inflation performance in a sample of industrial and transition economies by looking at policymakers’ incentives to inflate the economy, and the perceived costs of disinflation. It finds a significant effect of fiscal deficits on inflation, particularly (but not exclusively) in countries where the government securities market is not well developed. Other factors with significant effect on inflation include relative price changes, central bank independence, the exchange rate regime, and the degree of price liberalization; there is only limited evidence that other structural factors, such as those influencing the natural rate of unemployment, have a significant effect on inflation.
Series:
Working Paper No. 1998/023
Subject:
Central bank autonomy Central banks Exchange rate arrangements Financial institutions Foreign exchange Government securities Inflation Labor Prices Unemployment rate
English
Publication Date:
March 1, 1998
ISBN/ISSN:
9781451844016/1018-5941
Stock No:
WPIEA0231998
Pages:
29
Please address any questions about this title to publications@imf.org