WHY HAVE SO MANY DISINFLATIONS SUCCEEDED?

Marc Hofstetter

No 3777, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: Why is that the achievements of some disinflations from low and moderate peaks are longlived, whereas in others the gains in the inflationary front dissipate quickly? Based on an index of the sustainability of disinflations proposed in the paper, various competing explanations of what determines sustainability are tested. Three factors, potentially at the top of the list of many researchers, are shown to be insignificant: oil shocks, fiscal policy and inflation targeting. Nevertheless, other important features such as the exchange rate regime, achieving a low inflation rate during the disinflation and food price shocks are shown to be important variables driving the sustainability records.

Keywords: Disinflation; Monetary Policy; Supply Shocks; Inflation Targeting; Exchange (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 E58 F41 (search for similar items in EconPapers)
Pages: 35
Date: 2005-11-30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: WHY HAVE SO MANY DISINFLATIONS SUCCEEDED? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:003777

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