Inflation,Inflation Variability, and Output Performance. Venezuela 1951-2002

Víctor Olivo

MPRA Paper from University Library of Munich, Germany

Abstract: This paper explores the relationship between the level of inflation, inflation variability, and output performance in the Venezuelan economy for the period 1951-2002. The paper examines the mechanism through which higher inflation translates into lower non-oil real GDP growth. We find empirical evidence that supports Friedman's (1977) contention that higher inflation produces more inflation volatility /uncertainty that leads to relative price variability that in turn, is harmful for the proper functioning of the market as the best system for allocating resources.

Keywords: Inflation; inflation variability; inflation uncertainty; output growth; trend inflation; trend money growth; relative prices (search for similar items in EconPapers)
JEL-codes: E59 (search for similar items in EconPapers)
Date: 2014-04-09
New Economics Papers: this item is included in nep-cba and nep-mac
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