Cointegration between Electricity prices and the Consumer Price Index in Lao PDR

Soukvisan Khinsamone

Bulletin of Applied Economics, 2025, vol. 12, issue 2, 1-13

Abstract: This study investigates the relationship among electricity prices, exchange rates, and the Consumer Price Index (CPI) in Lao PDR using the nonlinear autoregressive distributed lag model. It employs time-series data from 1990 to 2023 and applies unit root tests, cointegration analysis, and bound testing to examine both long- and short-run relationships. The empirical results indicate that electricity price increases significantly contribute to inflation, while exchange rate depreciation has a stronger inflationary effect than appreciation. The short-run dynamics further confirm these asymmetric effects, with the CPI responding more strongly to depreciation than to appreciation. Additionally, the error correction term is negative and statistically significant, confirming that deviations from equilibrium gradually adjust over time. These findings highlight the importance of exchange rate stability and electricity price management in controlling inflation in Lao PDR.

Keywords: Electricity Prices; Consumer Price Index; NARDL Model; Lao PDR. (search for similar items in EconPapers)
JEL-codes: C32 E31 Q41 (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.riskmarket.co.uk/bae/journals-articles ... nload=attachment.pdf (application/pdf)

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: https://EconPapers.repec.org/RePEc:rmk:rmkbae:v:12:y:2025:i:2:p:1-13

Access Statistics for this article

Bulletin of Applied Economics is currently edited by Eleftherios Spyromitros

More articles in Bulletin of Applied Economics from Risk Market Journals
Bibliographic data for series maintained by Eleftherios Spyromitros-Xioufis ().