Skip to main content
Article
Inflation Stationarity during Latin American Inflation: Insights from Unit Root and Structural Break Analysis
Applied Economics
  • Tony Caporale, University of Dayton
  • Julia Paxton, Ohio University - Main Campus
Document Type
Article
Publication Date
1-1-2013
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
Peer Reviewed
Yes
Citation Information
Tony Caporale and Julia Paxton. "Inflation Stationarity during Latin American Inflation: Insights from Unit Root and Structural Break Analysis" Applied Economics Vol. 45 Iss. 15 (2013)
Available at: http://works.bepress.com/tony_caporale/41/