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Relative Prices and Inflation: New Evidence from Different Inflationary Contexts

Authors :
Caraballo, Mª Angeles
Dabús, Carlos Darío
Caraballo, Mª Angeles
Dabús, Carlos Darío
Source :
Applied Economics; 38; 16; 1931-1944
Publication Year :
2011

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

Details

Database :
OAIster
Journal :
Applied Economics; 38; 16; 1931-1944
Publication Type :
Electronic Resource
Accession number :
edsoai.on1256775107
Document Type :
Electronic Resource