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Inflation Determinants in Paraguay: Cost Push versus Demand Pull Factors

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  • Brieuc Monfort
  • Santiago Peña

Abstract

This article uses two analytical methodologies to understand the dynamics of inflation in Paraguay, the mark-up theory of inflation and the monetary theory of inflation. We also study the impact of different monetary aggregates. The results suggest that monetary factors, in particular currency in circulation, play a major role in determining long-run inflation, while foreign prices, in particular from Brazil, or some food products have a large impact on the short-term dynamics of inflation. Wage indexation may also contribute to locking up price increases.

Suggested Citation

  • Brieuc Monfort & Santiago Peña, 2008. "Inflation Determinants in Paraguay: Cost Push versus Demand Pull Factors," IMF Working Papers 2008/270, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/270
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    References listed on IDEAS

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    Cited by:

    1. Mehak Moazam & M. Ali Kemal, 2016. "Inflation in Pakistan: Money or Oil Prices," Working Papers id:11507, eSocialSciences.
    2. Oatlhotse Madito & Nicholas M. Odhiambo, 2018. "The Main Determinants Of Inflation In South Africa: An Empirical Investigation," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 9(2).

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