Open AccessConsumer Price Index (CPI) as a competitiveness inflation measure: Evidence from Jordan
Author(s) -
Osama Samih Shaban,
Mohammad Al-Attar,
Zaid Al-hawatmah,
Nafez Nimer Ali
Publication year - 2019
Publication title -
journal of governance and regulation
Language(s) - English
Resource type - Journals
eISSN - 2306-6784
pISSN - 2220-9352
DOI - 10.22495/jgr_v8_i2_p2
Subject(s) - inflation (cosmology) , consumer price index (south africa) , economics , exchange rate , price index , index (typography) , producer price index , econometrics , wholesale price index , effective exchange rate , order (exchange) , price level , inflation rate , monetary economics , interest rate , monetary policy , mid price , physics , finance , theoretical physics , world wide web , computer science
The purpose of this paper is to investigate the Consumer Price Index (CPI) as a competitiveness inflation measure and to determine whether an empirical relationship exists between the rates of inflation represented in CPI and the level of the real exchange rate. In order to achieve the objectives of this paper, the study calculated the consumer price index (CPI) as an inflation rate for the period 2010-2018, and also adopted the real exchange rates for the same period. In order to achieve the objectives of the study, a Pearson correlation analysis between the average CPI rates, and the average exchange rate were conducted. The outcomes of the correlation analysis conducted reflect a negative correlation of 62% between the exchange rates and the CPI’s inflation rates, which means that when CPI rates cause direct opposite effect of the determination level of exchange rates on the Jordanian economy.