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Author/Editor:
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Grigorian, David A. ; Khachatryan, Armine ; Sargsyan, Grigor
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Publication Date:
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December 01, 2004
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Electronic Access:
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Free Full text
(PDF file size is 2,982KB).
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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
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Summary:
This paper is the first attempt to look at inflation dynamics and monetary transmission mechanisms in Armenia in the context of a full information model containing three interrelated markets: foreign exchange, money, and labor. Using the vector error correction model (VECM) approach, we find that the exchange rate pass-through to prices is very strong relative to credit, wage, and interest rate channels. The analysis suggests a relatively fast adjustment of prices to long-run disequilibria in the exchange rate market, albeit with initial overshooting of the price level. In addition, we find no evidence of prices responding to changes in money and wages in a statistically significant manner.
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Series:
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Working Paper No. 04/229
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Subject(s):
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Price adjustments | Armenia | Exchange markets | Wages | Money markets | Labor markets | Economic models
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Author's Keyword(s):
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Armenia | price dynamics | error correction model |
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English
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Publication Date:
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December 01, 2004
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ISBN/ISSN:
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1934-7073
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Format:
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Paper
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Stock No:
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WPIEA2292004
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Pages:
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29
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Price:
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US$15.00 )
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Please address any questions about this title to
publications@imf.org
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