Inflation Determinants in Paraguay: Cost Push versus Demand Pull Factors

December 1, 2008

Preview Citation

Format: Chicago

Brieuc Monfort, and Santiago Peña. Inflation Determinants in Paraguay: Cost Push versus Demand Pull Factors, (USA: International Monetary Fund, 2008) accessed December 22, 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

This article uses two analytical methodologies to understand the dynamics of inflation in Paraguay, the mark-up theory of inflation and the monetary theory of inflation. We also study the impact of different monetary aggregates. The results suggest that monetary factors, in particular currency in circulation, play a major role in determining long-run inflation, while foreign prices, in particular from Brazil, or some food products have a large impact on the short-term dynamics of inflation. Wage indexation may also contribute to locking up price increases.

Subject: Consumer price indexes, Currencies, Demand for money, Exchange rates, Inflation

Keywords: Core inflation index, Inflation dynamics, Monetary aggregate, U.S. dollar, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/270
Stock No:

WPIEA2008270
ISBN:

9781451871289
ISSN:

1018-5941

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