Inflation and Monetary Pass-Through in Guinea

20 Pages Posted: 9 Feb 2006

See all articles by Rodolphe Blavy

Rodolphe Blavy

International Monetary Fund (IMF) - African Department

Date Written: December 2004

Abstract

The paper analyzes the dynamics of inflation in Guinea during 1992-2003 applying cointegration and error-correction modeling to a bivariate model that includes consumer price and monetary variables. The empirical results, based on quarterly data, confirm the existence of a long-run relationship between money supply and consumer prices. This paper argues further that the pass-through has increased in recent years. Short-term dynamics are shown to accentuate the long-run impact. Impulse response analysis shows that a shock in the money stock will have an increasing impact over two years and will then stabilize at a higher level.

Keywords: Guinea, inflation, money supply, cointegration, error correction model

JEL Classification: C32, E31, E52, O55

Suggested Citation

Blavy, Rodolphe, Inflation and Monetary Pass-Through in Guinea (December 2004). IMF Working Paper No. 04/223, Available at SSRN: https://ssrn.com/abstract=879048

Rodolphe Blavy (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

1700 19th Street, NW
Washington, DC 20431
United States

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