Inflation Uncertainty and Relative Price Variability in WAEMU Countries

By . Kerstin Gerling, Carlos Fernandez Valdovinos

March 1, 2011

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Format: Chicago

. Kerstin Gerling, and Carlos Fernandez Valdovinos. Inflation Uncertainty and Relative Price Variability in WAEMU Countries, (USA: International Monetary Fund, 2011) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Using a consistent dataset and methodology for all eight member countries of the West African Economic and Monetary Union (WAEMU) from 1994 to 2009, this paper provides evidence of the two major channels for real effects of inflation: inflation uncertainty and relative price variability. In line with theory and most evidence for advanced and emerging market economies, higher inflation increases inflation uncertainty and relative price variability in all WAEMU countries. However, the pattern, magnitude and timing of these two channels vary considerably by country. The findings raise several policy issues for future research.

Subject: Commodity price shocks, Consumer price indexes, Deflation, Inflation, Monetary unions

Keywords: Headline inflation, Inflation uncertainty, Monetary policy, WAEMU country, WP

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/059
Stock No:

WPIEA2011059
ISBN:

9781455221035
ISSN:

1018-5941

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