What triggers inflation in emerging market economies?
By: Ilker Domaç, and Eray M. Yucel.
Contributors: Yucel, Eray M.; World Bank.
Series: Policy research working paper ;; 3376; Policy research working papers (Online) ;; 3376.
Publisher: World Bank
Published: 2004
Place of publication: [Washington, D.C
Language: eng
Format: Electronic resource
Subjects: Inflation (Economics) -- Developing countries
Description: "Emerging market economies (EMEs) have experienced a noticeable decline in inflation since the mid-1990s.  Whether this stable price environment in EMEs is likely to endure and what kind of policies need to be followed to ensure price stability, however, still continue to be questions of considerable policy relevance. Domaç, and Yucel investigate the factors associated with the start of 24 inflation episodes in 15 EMEs between 1980 and 2001.  They use pooled probit analysis to estimate the contribution of the key factors to inflation starts.  Their empirical results suggest that increases in the output gap, agricultural shocks, and expansionary fiscal policy raise the probability of inflation starts in EMEs.  Their findings also indicate that a more democratic environment and an increase in capital flows relative to GDP reduce the probability of inflation starts.  This paper--a product of the Poverty Reduction and Economic Management Sector Unit, Europe and Central Asia Region--is part of a larger effort in the region to enhance knowledge on the inflationary process and its policy implications"--World Bank web site.
Notes: Includes bibliographical references.
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Mode of access: World Wide Web.