What triggers inflation in emerging market economics?

Ilker Domac and Mustafa Yücel

No 3376, Policy Research Working Paper Series from The World Bank

Abstract: Emerging market economies (EMEs) have experienced a noticeable decline in inflation since the mid-1990s. Whether this stable price environment in EMEs is likely to endure and what kind of policies need to be followed to ensure price stability, however, still continue to be questions of considerable policy relevance. The authors investigate the factors associated with the start of 24 inflation episodes in 15 EMEs between 1980 and 2001. They use pooled probit analysis to estimate the contribution of the key factors to inflation starts. Their empirical results suggest that increases in the output gap, agricultural shocks, and expansionary fiscal policy raise the probability of inflation starts in EMEs. Their findings also indicate that a more democratic environment and an increase in capital flows relative to GDP reduce the probability of inflation starts.

Keywords: Environmental Economics&Policies; Markets and Market Access; Banks&Banking Reform; Economic Theory&Research; Settlement of Investment Disputes; Environmental Economics&Policies; Economic Theory&Research; Markets and Market Access; Access to Markets; Financial Intermediation (search for similar items in EconPapers)
Date: 2004-08-01
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... ered/PDF/WPS3376.pdf (application/pdf)

Related works:
Journal Article: What Triggers Inflation in Emerging Market Economies? (2005)
Working Paper: What Triggers Inflation in Emerging Market Economies? (2003)
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:wbk:wbrwps:3376

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().