Title

Inflation Stationarity during Latin American Inflation: Insights from Unit Root and Structural Break Analysis

Document Type

Article

Publication Date

2013

Publication Source

Applied Economics

Abstract

Inflation stationarity has important theoretical and policy implications, yet most of the literature has focused on low inflation countries. This article investigates inflation stationarity in Brazil, Argentina, Chile, Mexico and Bolivia during a hyperinflationary period from 1980 to 2004. We test for structural breaks in inflation, discuss the breaks in terms of changes in monetary regimes, and test if accounting for these structural breaks changes the nonstationarity results for those nations that ‘fail’ the traditional Augmented Dickey–Fuller (ADF) test for inflation. All five are found to have inflation rates that are I(0) once the structural breaks analysis is incorporated into our unit root tests.

Inclusive pages

2001-2010

ISBN/ISSN

0003-6846

Comments

Permission documentation is on file.

Publisher

Taylor & Francis

Volume

45

Issue

15

Peer Reviewed

yes