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Relative Prices and Inflation: New Evidence from Different Inflationary Contexts

[journal article]

Caraballo, Mª Angeles; Dabús, Carlos Darío; Caraballo, Mª Angeles

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Please use the following Persistent Identifier (PID) to cite this document:http://nbn-resolving.de/urn:nbn:de:0168-ssoar-239067

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Abstract This paper analyzes the relationship between inflation and relative price variability, in the direction of the latter, in two countries with very different inflationary experiences: Argentina and Spain. To address this objective, using disaggregated price indexes (the Wholesale Price Index for Argentina and the Consumer Price Index for Spain), we delimitate different inflationary regimes and compute a set of regressions for each country. Our results suggest evidence in favour of the non-neutrality of inflation (mostly in hyperinflation periods) and do not support either the menu costs or the signal extraction approaches. We also detect significant structural changes in the relationship depending on the inflationary regime
Document language English
Publication Year 2006
Page/Pages p. 1931-1944
Journal Applied Economics, 38 (2006) 16
DOI http://dx.doi.org/10.1080/00036840500427171
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)