The Nonmonetary Determinants of Inflation: A Panel Data Study

29 Pages Posted: 15 Feb 2006

See all articles by Carlo Cottarelli

Carlo Cottarelli

International Monetary Fund (IMF)

Mark E.L. Griffiths

affiliation not provided to SSRN

Reza Moghadam

affiliation not provided to SSRN

Date Written: March 1998

Abstract

This paper explains inflation performance in a sample of industrial and transition economies by looking at policymakers` incentives to inflate the economy, and the perceived costs of disinflation. It finds a significant effect of fiscal deficits on inflation, particularly (but not exclusively) in countries where the government securities market is not well developed. Other factors with significant effect on inflation include relative price changes, central bank independence, the exchange rate regime, and the degree of price liberalization; there is only limited evidence that other structural factors, such as those influencing the natural rate of unemployment, have a significant effect on inflation.

Keywords: inflation, fiscal policy, panel data

JEL Classification: E31, E42, E63

Suggested Citation

Cottarelli, Carlo and Griffiths, Mark E.L. and Moghadam, Reza, The Nonmonetary Determinants of Inflation: A Panel Data Study (March 1998). IMF Working Paper No. 98/23, Available at SSRN: https://ssrn.com/abstract=882254

Carlo Cottarelli (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Mark E.L. Griffiths

affiliation not provided to SSRN

Reza Moghadam

affiliation not provided to SSRN

No Address Available

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
605
Abstract Views
2,631
rank
49,847
PlumX Metrics