ANSWER OF AN INFLATIONARY CIRCUIT TO THE POSSIBLE SHOCKS IN ECONOMY

Cornelia Scutaru ()

Journal for Economic Forecasting, 2001, issue 3, pages 63-77

Abstract: The paper argues that inside a transitional economy there are circuits driving processes of self-sustaining the inflationary phenomenon, namely inflationary circuits. The author analyzes the dynamics of the main indicators of inflationary process, emphasizing the interaction between two of the most powerful inflationary circuits, namely the wage inflationary circuit and the exchange rate inflationary circuit. It has investigated the data with the help of an unrestricted VAR using as variables the consumer price index with a fixed base in 1990, the net nominal wage and the exchange rate leu-USD. The author finds that inflation responds strongly to the exchange rate shocks reaching a maximum after six months, the net nominal wage has a sharp increase in the first semester after a shock in the inflation followed by a slow absorption, while the exchange rate reacts strongly in the first 2-3 months and it diminishes afterwards.

Keywords: inflation; inflationary shocks; time series models; monetary policy (search for similar items in EconPapers)
JEL-codes: C32 E24 E31 E5 (search for similar items in EconPapers)
Date: 2001

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:rjr:romjef:v::y:2001:i:3:p:63-77

Access Statistics for this article

Journal for Economic Forecasting is edited by Lucian Liviu Albu and Cornelia Scutaru

More articles in Journal for Economic Forecasting from Institute for Economic Forecasting
Contact information at EDIRC.
Series data maintained by Corina Saman ().