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Determinants of inflation in Venezuela: Markup approach

José Contreras () and Nora Guarata ()
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José Contreras: Oficina de Investigaciones Económicas. BCV. Venezuela.
Nora Guarata: Oficina de Investigaciones Económicas. BCV. Venezuela.

Economía, 2014, vol. 39, issue 38, 9-31

Abstract: The article aims to develop an econometric model that considers elements of short and long term to analyze the behavior of inflation in Venezuela in a theoretical approach of a unit cost model. In the first place, we estimated a long-term relationship or cointegration between the cost structure and the behavior of the general price index. Secondly, a short run model is constructed using the technique of error correction model with the following variables: inflation, internal costs, external costs, inflation inertia, output gap and the impact of the error correction term from the long run equation. In the short run the variable representing the markup influences inflation.

Keywords: markup; inflation; cointegration and error correction model. (search for similar items in EconPapers)
JEL-codes: C5 C4 D4 E3 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:ula:econom:v:39:y:2014:i:38:p:9-31

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