Market Disequilibria and Inflation in Uzbekistan, 1994-2000

25 Pages Posted: 20 Apr 2016

Date Written: September 2003

Abstract

Ranaweera develops and applies a macroeconomic framework to ascertain the influence of domestic disequilibria and external shocks on inflation dynamics in Uzbekistan. Using quarterly data for the period 1994:01 to 2000:03, he estimates several "long-run" relationships for the goods, money, and foreign exchange markets of Uzbekistan which are characterized by multiple exchange rates, import restrictions, and other domestic administrative controls. The empirical estimates, which use error correction mechanisms for different markets, show that domestic monetary and output developments, and changes in the official exchange rate compared with the parallel market rate have had a significant influence on the short-run behavior of the foreign exchange market in Uzbekistan. Furthermore, disequilibria in the product and money markets are the major forces driving short-run inflation dynamics in Uzbekistan. It should be noted that the study has been constrained by both the quantity and the quality of quarterly data available for the Uzbekistan economy.

This paper - a product of the Development Data Group, Development Economics Senior Vice Presidency - is part of an ongoing effort in the group to improve quantitative analytical tools for country assistance strategies.

Suggested Citation

Ranaweera, Thilak, Market Disequilibria and Inflation in Uzbekistan, 1994-2000 (September 2003). Available at SSRN: https://ssrn.com/abstract=636563

Thilak Ranaweera (Contact Author)

World Bank ( email )

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Washington, DC 20433
United States