The Transmission of Supply Shocks to Inflation: the Case of Argentina (2004-2022)

Lucas Ordóñez
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Lucas Ordóñez: Universidad de Buenos Aires - IIEP

No 351, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: This article investigate show domestic and external supply shocks influence inflation in Argentina using the Local Projections methodology. I categorise supply shocks into two groups: domestic and external. Domestic supply shocks include the nominal exchange rate and regulated prices. In contrast, external supply shocks include international energy and food prices. The results reveal two main findings. First, both domestic and external supply shocks positively influence inflation. Second, there are significant variations in the magnitude and dynamic of how these supply shocks are transmitted to inflation. These findings provide new evidence on how supply shocks influence inflationary dynamics in developing countries and small open economies.

Keywords: Local Projections; Supply shocks; Inflation; Exchange rate pass-through. (search for similar items in EconPapers)
JEL-codes: C22 E31 F41 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2025-01
New Economics Papers: this item is included in nep-mon and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:351

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