Inflation and Monetary Pass-Through in Guinea

December 1, 2004

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Rodolphe Blavy. Inflation and Monetary Pass-Through in Guinea, (USA: International Monetary Fund, 2004) accessed November 23, 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 analyzes the dynamics of inflation in Guinea during 1992-2003 applying cointegration and error-correction modeling to a bivariate model that includes consumer price and monetary variables. The empirical results, based on quarterly data, confirm the existence of a long-run relationship between money supply and consumer prices. This paper argues further that the pass-through has increased in recent years. Short-term dynamics are shown to accentuate the long-run impact. Impulse response analysis shows that a shock in the money stock will have an increasing impact over two years and will then stabilize at a higher level.

Subject: Consumer price indexes, Consumer prices, Demand for money, Inflation, Monetary base, Money, Prices

Keywords: Cointegration, Consumer price index market basket, Consumer price indexes, Consumer price inflation, Consumer prices, Demand for money, Error correction model, Error-correction modeling, Guinea, Inflation, Inflation equation, Inflation expectation, Inflation inertia, Inflation variable, Monetary base, Money growth, Money supply, Money-inflation relationship, Price level, Sub-Saharan Africa, Vector error correction, WP

Publication Details

Pages:

20
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2004/223
Stock No:

WPIEA2232004
ISBN:

9781451875324
ISSN:

1018-5941

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