Inflation Uncertainty and Relative Price Variability in WAEMU Countries

Author/Editor:

Kerstin Gerling ; Carlos Fernandez Valdovinos

Publication Date:

March 1, 2011

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:

Using a consistent dataset and methodology for all eight member countries of the West African Economic and Monetary Union (WAEMU) from 1994 to 2009, this paper provides evidence of the two major channels for real effects of inflation: inflation uncertainty and relative price variability. In line with theory and most evidence for advanced and emerging market economies, higher inflation increases inflation uncertainty and relative price variability in all WAEMU countries. However, the pattern, magnitude and timing of these two channels vary considerably by country. The findings raise several policy issues for future research.

Series:

Working Paper No. 11/59

Subject:

English

Publication Date:

March 1, 2011

ISBN/ISSN:

9781455221035/1018-5941

Stock No:

WPIEA2011059

Format:

Paper

Pages:

44

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