Inflation Dynamics in Madagascar, 1971-2000

Author/Editor:

Emilio Sacerdoti ; Yuan Xiao

Publication Date:

October 1, 2001

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The paper analyzes the dynamics of inflation in Madagascar in the period 1971-2000, applying cointegration analysis and error correction modeling. The empirical results, based on quarterly data, confirm that there exists a stable money demand relationship, as well as a purchasing power relationship in the long run. The former enters the short-run dynamics of inflation and money growth, while the latter affects the short-run dynamics of the exchange rate only. We also find that an appreciation has a direct negative impact on inflation and that inflation inertia is important. In addition, we conduct FIML estimation of the system and trace the impulse responses to various shocks.

Series:

Working Paper No. 01/168

Subject:

English

Publication Date:

October 1, 2001

ISBN/ISSN:

9781451858266/1018-5941

Stock No:

WPIEA1682001

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

27

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