Political Instability and Inflation Volatility, Issues 2006-2212
International Monetary Fund, Sep 1, 2006 - Inflation (Finance) - 9 pages
The purpose of this paper is to empirically determine the causes of worldwide diversity of inflation volatility. We show that higher degrees of political instability, ideological polarization, and political fragmentation are associated with higher inflation volatility.
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Political Instability and Inflation Volatility (EPub)
Mr. Francisco Josť Veiga,Mr. Ari Aisen
Limited preview - 2006
3-year period According to Cukierman Agriculture percent Aisen and Veiga associated with higher becomes more volatile Change in oil CNTS coefficient is expected covering around 100 deep determinants determinants of inflation deviation of inflation economic variables Edwards estimated Executive changes explanatory variable fiscal policies freedom and higher GDP per capita greater ideological polarization greater political instability greater reliance groups fixed effects high inflation levels higher inflation volatility includes developing countries Index of economic inflation becomes lead to higher leads to greater levels and volatilities Log(Inflation Log[SD(Inflation logarithm of inflation lower economic freedom model of column Number oil prices panel data model percent of GDP polarization and fragmentation political and institutional political instability leads positive coefficient Real overvaluation reliance on seigniorage results Sahay SD(GDP growth seigniorage revenues standard deviation statistically significant Tabellini 1992 tests that consist Three-Year Period Trade percent Vegh volatile at higher volatile inflation rates volatility on growth