Sources of inflation in Mexico, 1989-2000: A multicausal error correction analysis

Authors

  • Gerardo Esquivel El Colegio de México, A.C.
  • Raúl Razo Banco de México

DOI:

https://doi.org/10.24201/ee.v18i2.184

Keywords:

inflation, Mexico, monetary market, labor market, exchange rate market

Abstract

This article analyzes the determinants of inflation in Mexico during the 1989–2000 period. Inflation is modeled as a function of deviations in the long-run relations that may exist in the monetary, labor and exchange rate markets. By using cointegration techniques, we obtain an error-correction model where money excess, wage pressure and deviations of the Purchasing Power Parity are possible sources of inflation. The model includes an inertial factor and a policy component due to government-controlled price changes in certain goods. The results show that all the factors mentioned have contributed to the determination of the inflationary dynamics in Mexico.

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Published

2003-07-01

How to Cite

Esquivel, G., & Razo, R. (2003). Sources of inflation in Mexico, 1989-2000: A multicausal error correction analysis. Estudios Económicos De El Colegio De México, 18(2), 181–226. https://doi.org/10.24201/ee.v18i2.184
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