Cross-Sectional and Longitudinal Inflation Asymmetries

Randal John Verbrugge ()

Macroeconomics from EconWPA

Abstract: This paper re-examines evidence relating mean inflation to cross- sectional inflation asymmetry, and investigates longitudinal asymmetry in disaggregated price series. The asymmetry test used possesses two important characteristics: it has high power, and it is not dominated by outliers. In contrast to Bryan and Cecchetti (1996), the results here suggest that there does exist significant positive correlation between mean inflation and cross-sectional inflation asymmetry. However, the explanatory power of median inflation is small. Longitudinal inflation asymmetry is evident in almost all the price series investigated here, regardless of frequency. This finding is intriguing, as neither money nor output growth is asymmetric.

JEL-codes: E31 E32 C14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mon
Date: 1998-09-30
Note: Type of Document - pdf; prepared on IBM PC; pages: 17; figures: included
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http://129.3.20.41/eps/mac/papers/9809/9809018.pdf (application/pdf)

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