Inflation Dynamics in the Dominican Republic
February 1, 2004
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Summary
This paper investigates the determinants of inflation in the Dominican Republic during 1991-2002, a period characterized by remarkable macroeconomic stability and growth. By developing a parsimonious and empirically stable error-correction model using quarterly observations, the paper finds that inflation is explained by changes in monetary aggregates, real output, foreign inflation, and the exchange rate.
Subject: Currency markets, Demand for money, Exchange rates, Financial markets, Foreign exchange, Inflation, Monetary base, Money, Prices
Keywords: Cointegration, Currency markets, Demand for money, drives inflation, Error-Correction, Exchange rates, Global, goods market, Inflation, inflation dynamics, inflation equation, interest rate differential, low-inflation environment, Monetary base, nominal exchange rate, WP
Pages:
21
Volume:
2004
DOI:
Issue:
029
Series:
Working Paper No. 2004/029
Stock No:
WPIEA0292004
ISBN:
9781451844832
ISSN:
1018-5941
