Naslov
Modelling Inflation in Croatia

Autori
Vizek, Maruška ; Broz, Tanja

Izvornik
Emerging markets finance and trade (1540-496X) 45 (2009), 6; 87-98

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, članak, znanstveni

Ključne riječi
inflation modelling; cointegration; general-to-specific; Croatia

Sažetak
This paper constructs a quarterly inflation model for Croatia, using the generalto- specific approach to model inflation dynamics. A two-step procedure is followed. First, we conduct a long-run sectoral analysis of inflation sources, yielding long-run determinants of inflation: markup, excess money, nominal effective exchange rate, and the output gap. Second, we estimate an equilibrium error correction model of inflation, deploying, among other variables of interest, the long-run solutions derived in the first step. The derived model of inflation suggests that inflation inertia and Croatian trading partners’ inflation are most important for explaining the short-run behavior of inflation. Apart from these two variables, markup, excess money, output gap, nominal exchange rate, and broad money also contribute to inflation changes in the short run.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA