Open AccessMACROECONOMETRIC STABILIZATION AND IMF POLICIES: A SURVEILLANCE OF INFLATION
Author(s) -
Christopher E.S. Warburton
Publication year - 2015
Publication title -
revista galega de economía
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.159
H-Index - 6
eISSN - 2255-5951
pISSN - 1132-2799
DOI - 10.15304/rge.23.4.2764
Subject(s) - inflation (cosmology) , economics , exchange rate , price of stability , monetary policy , inflation targeting , monetary economics , productivity , aggregate data , macroeconomics , work (physics) , money supply , mechanical engineering , physics , theoretical physics , engineering , medicine , pathology
This paper uses time series data from 1960 to 2012 to evaluate the long-run relationshipbetween aggregate money supply and changes in the general price level (inflation) for aselected group of countries with historically stable prices and episodes of very high inflation.Recent paradigmatic shifts from exchange-rate-based stabilization policies toconditionalities involving price stability have greatly influenced the empirical work of thispaper. Empirical results indicate that the money supply and inflation are cointegrated insome countries with high spells of inflation, such as Argentina, Brazil, and Mexico, but thatthe variables may not be cointegrated with each other for countries with prices that aregenerally and historically stable, such as the UK and the US. The paper highlights the need forgood quality governance, employment, and productivity in surveillance measures that aredesigned to obtain external balance.