Relative Prices and Inflation: New Evidence from Different Inflationary Contexts

Carlos Usabiaga, M. Angeles Caraballo and Carlos Dabús

No 338, Econometric Society 2004 Latin American Meetings from Econometric Society

Abstract: This paper carries out a comparative analysis of the inflation effects on relative price variability (RPV) in two economies with a inflationary experiences clearly different: Argentina and Spain. The results indicate non-neutrality of inflation, particularly in extreme inflation. The main determinants of RPV are the inflation rate, its variability, and unexpected inflation. Hence, our results neither supports the “menu-cost†approach -there are not monetary rigidities in high inflation-, nor the signal “extraction†approach, although the latter seems to be suitable for the Spanish case. In turn, we found significant structural changes in this relation in both countries, which suggest that the Inflation-RPV relation is different among different inflationary regimes

Keywords: Inflationary regimes; Argentina; Spain (search for similar items in EconPapers)
JEL-codes: E0 (search for similar items in EconPapers)
Date: 2004-08-11
New Economics Papers: this item is included in nep-cba and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://repec.org/esLATM04/up.24351.1084802325.pdf (application/pdf)

Related works:
Journal Article: Relative prices and inflation: new evidence from different inflationary contexts (2006)
Working Paper: Relative Prices and Inflation: New Evidence from Different Inflationary Contexts (2004)
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:ecm:latm04:338

Access Statistics for this paper

More papers in Econometric Society 2004 Latin American Meetings from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().