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Inflationary Dynamics in Guatemala

Author

Listed:
  • Thomas M. FULLERTON
  • Miguel MARTINEZ
  • Wm. Doyle SMITH
  • Adam WALKE

    (University of Texas, USA.)

Abstract
Short-run price dynamics for Guatemala are analyzedusing a linear transfer function methodology. This approach has previously been employed for other national economies such as the United States, Mexico, Colombia, Ecuador, and Nigeria. The data for this study range from 1960 to 2010. Inflation is measured using the consumer price index. Explanatory variables include the monetary base, real output, interest rates, and the exchange rate. Allof the estimated coefficients exhibit the arithmetic signs hypothesized by the theoretical model. Almostall of the parameter estimates satisfy the 5-percent significance criterion and all exhibit economically plausible magnitudes. Estimation results indicate that although monetary policy effects begin to materialize within twelve months of implementation, the bulk of the impacts associated with the money supply do not occur until the second year after any monetary policy action is taken.

Suggested Citation

  • Thomas M. FULLERTON & Miguel MARTINEZ & Wm. Doyle SMITH & Adam WALKE, 2015. "Inflationary Dynamics in Guatemala," Journal of Economics and Political Economy, KSP Journals, vol. 2(4), pages 436-444, December.
    • Handle: RePEc:ksp:journ1:v:2:y:2015:i:4:p:436-444
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Inflation; Guatemala; Monetary Economics; Applied Econometrics.;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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