Template-Type: ReDIF-Paper 1.0

Author-Name: Magdalena Petrovska
Author-Name-First: Magdalena
Author-Name-Last: Petrovska
Author-Email:  petrovskam@nbrm.mk
Author-Workplace-Name: National Bank of the Republic of Macedonia

Author-Name:  Gani Ramadani
Author-Name-First: Gani
Author-Name-Last: Ramadani
Author-Email: ramadanig@nbrm.mk
Author-Workplace-Name: National Bank of the Republic of Macedonia

Title:  Inflation Persistence and Price Dynamics in Macedonia: Theory and Empirical Analysis 
Abstract:  We apply classical econometric method to characterize the dynamic behavior of the 
quarter-on-quarter inflation over the period 1997q1-2010q1. In particular, we estimate univariate 
autoregressive (AR) models for the aggregate consumer price inflation series and as well as for 
the consumer price inflation at representative product groups level, taking into account the 
influence of structural breaks in the mean of inflation on the level of persistence. We find strong 
evidence for a break in the mean for the housing, transport and communication services and 
culture and leisure inflation. Allowing for a break in the mean of inflation, the inflation measures 
generally exhibit relatively lower inflation persistence. We also analyze price dynamics in 
Macedonia at representative products level over the same period. 


Length:  23 pages
Creation-Date:  2010-06
Revision-Date: 2010-06
File-URL: http://www.nbrm.mk/WBStorage/Files/WebBuilder_EmpiricalAnalysisofInflationPersistanceinMacedonia.pdf
File-Format: Application/pdf
File-Function: First version, 2010
Number: 2010-01
Classification-JEL: E31, C22, C11 


Keywords: Inflation, inflation persistence, price dynamics 


Handle: RePEc:mae:wpaper:2010-01