Title

From Debt Crisis to Tequila Crisis: Inflation Stationarity through Mexico's Turbulent Decades

Document Type

Article

Publication Date

2011

Publication Source

Applied Economics Letters

Abstract

The volatility of Mexican inflation throughout the 1980s debt crisis and the 1994 tequila crisis provides an interesting backdrop to test for structural breaks and inflation stationarity in a developing country context. By allowing for multiple breaks, four inflationary regimes are identified during the period 1980 to 2004. Initial unit root tests reject stationarity; however, by incorporating structural break analysis, inflation is found to be I(0). The structural break analysis and the stationarity analysis point to monetary and fiscal determinants of inflation.

Inclusive pages

1609-1612

ISBN/ISSN

1350-4851

Comments

Permission documentation is on file.

Publisher

Taylor & Francis

Volume

18

Issue

16

Peer Reviewed

yes