Modeling Inflation in Georgia

November 1, 2003

Preview Citation

Format: Chicago

Wojciech Maliszewski. Modeling Inflation in Georgia, (USA: International Monetary Fund, 2003) accessed December 25, 2024

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 explains the behavior of inflation in Georgia in the post-stabilization period. A long-run equation linking prices to money and the exchange rate, as well as a short-run, dynamic equation for inflation are estimated. The inflation equation is stable, points to a dominant role of the exchange rate in the behavior of inflation and shows a low persistence of inflation in Georgia. The equation explains well the behavior of inflation after the Russian crises, when inflation increased sharply but was quickly brought under control, as the National Bank of Georgia kept its monetary policy tight and the exchange rate stable.

Subject: Currency markets, Demand for money, Exchange rate adjustments, Exchange rates, Financial markets, Foreign exchange, Inflation, Money, Prices

Keywords: Cointegration, Currency markets, Demand for money, Depreciation series, Dollar, Exchange rate, Exchange rate adjustments, Exchange rate depreciation, Exchange rates, Georgia, Inflation, Inflation equation, Inflation terms, Long-run price equation, Transition, U.S. dollar, U.S. Dollar exchange rate, WP

Publication Details

Pages:

23
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/212
Stock No:

WPIEA2122003
ISBN:

9781451874914
ISSN:

1018-5941

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