The Structuralist Theory of Inflation and Structural Inflation in Chile, 1950-1972: The Lagging Food Supply Hypothesis RevisitedThis study investigates the agricultural bottenleneck hypothesis of the structuralist inflation approach. It presents a consistent model of inflation based on the main assumptions of the structuralist approach. The structure of the model is based on the distinction between structural inflationary pressure and propagation mechanism. the period 1950-1972. The stability of the inflation process is investigated and inflation multiplier estimates are derived for all the exogenous variables in the model. Only a small fraction of the persistent and high inflation during the period can be explained as a result of the structural inflationary pressure. An important factor that explains the high and persistent inflation is the existence of a powerful propagation mechanism of inflation. This means that any exogenous disturbance that affects an important price in the economy can have significant inflationary effects. It seems that the explanation of persistent inflation should be focused on this propagation mechanism. |
Contents
i | 5 |
The Basic Assumptions of the Structuralist Model Reviewed | 26 |
CHAPTER FOUR | 56 |
Copyright | |
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Common terms and phrases
aggregate aggregate demand agricultural bottleneck agricultural market agricultural prices agricultural supply assumed assumption average capacity utilization causality ceteris paribus Chile Chilean coefficient constant consumer price index Corbo Cortázar demand function determined downward rigid economic endogenous equilibrium relative price estimates excess demand exogenous exogenous variables factor Finally food price important În.t income inflation process inflationary expectations instrumental variable land latifundios Latin America monetarism monetarist monetary policy money supply Moreover N-market N-price N-sector nominal wage non-food price null hypothesis obtained output P₁ parameter Phillips curve present price adjustment price equation price growth rate price level propagation mechanism block quarterly real wage regression relative price change relative price growth relative price increase sample period sector significance level simulation specification stability statistics structural inflation rate structural pressure block structuralist hypothesis structuralist theory structuralist view theoretical tion trade unemployment Wachter wage changes wage equation wage level