Modelling inflation shifts and persistence in Tunisia: perspectives from an evolutionary spectral approach

Zied Ftiti (), Khaled Guesmi, Nguyen and Frédéric Teulon

Applied Economics, 2015, vol. 47, issue 57, 6200-6210

Abstract: This article examines the dynamic characteristics of the inflation rate in Tunisia over the last two decades, and particularly following the onset of the Arab Spring in 2010 which causes distortions in this country's monetary policy. We focus on the two specific dimensions of the Tunisian inflation rate: inflation regimes and persistence. We tackle this issue by adopting an evolutionary spectral approach, initially proposed by Priestley and Tong (1973). Our main findings indicate a stable inflation regime in the last 10 years, with an average inflation rate of around 5.5%. It is also found that the Tunisian inflation experienced a high degree of inertia which reflects its gradual responses to shocks. We also discuss the policy implications of these results, which typically require policy-makers to implement sound institutional reforms to reduce inflation.

Date: 2015
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Related works:
Working Paper: Modeling inflation shifts and persistence in Tunisia: Perspectives from an evolutionary spectral approach (2015)
Working Paper: Modelling Inflation Shifts and Persistence in Tunisia: Perspective from an Evolutionary spectral approach (2014)
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DOI: 10.1080/00036846.2015.1068918

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