Trade partners inflation as a benchmark for setting the inflation target in Costa Rica
Keywords:
inflation, trade partners, structural break, tradable goodAbstract
In this working paper we present a measure of trade partner’s inflation which can serve as a benchmark for setting the long term inflation target by the authorities of the Central Bank of Costa Rica. This metric is constructed by weighting the Consumer Price Indexes of the main trading partners based on the relative importance of each partner in total trade with Costa Rica. Since the success of the Inflation Targeting monetary regimen depends crucially on the ability of the Central Bank to anchor inflation expectations to the long term inflation target, we consider that a target of 3%, which is equal to the average of the inflation rate for the trading partner´s between years 2000 and 2012, will allow the BCCR to fulfill its goals of low and stable inflation rate.
References
Antoshin, S., Berg, A. & Souto, M. (2008). Testing for Structural Breaks in Small Samples.
(Papers 08/75). Recuperado del sitio de internet de International Monetary Fund
http://www.imf.org/external/pubs/cat/longres.aspx?sk=21808
Bai, J. & Perron, P. (1998). Computation and Analysis of Multiple Structural-Change
Models. Recuperado de
https://papyrus.bib.umontreal.ca/xmlui/bitstream/handle/1866/457/9807.pdf?se
quence=1
Ciccarelli, M. & Mojon, B. (diciembre, 2005). Global Inflation (No 357). Working Papers
Central Bank of Chile 357, Central Bank of Chile. Recuperado de
http://www.bcentral.cl/estudios/documentos-trabajo/pdf/dtbc357.pdf
Harberger, A. (2004). The real exchange rate: Issues of concept and measurement. Recuperado de http://www.imf.org/external/np/res/seminars/2004/mussa/pdf/haberg.pdf
Heenan, G., Peter, M., & Roger, S. (2006). Implementing Inflation Targeting: Institutional Arrangements, Target Design, and Communications (WP/06/278). Recuperado del sitio de internet de International Monetary Fund http://www.imf.org/external/pubs/ft/wp/2006/wp06278.pdf
Hendry, D. & Clements, M. P. (2001). Economic Forecasting: Some Lessons from Recent Research (Working Paper No 82). Recuperado del sitio de internet de University of Oxford, Economics Group, Nuffield College http://ora.ox.ac.uk/objects/uuid:69d0f5b9-c225-49ef-a17a-c36e6bd31b6d/
Horváth, R. & Matějů, J. (2011). How are inflation targets set? (IES Working Papers 1/2011). Recuperado del sitio de internet de Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies http://ies.fsv.cuni.cz/default/file/download/id/15301
Monacelli, T. & Sala, L. (febrero, 2009). The International Dimension of Inflation: Evidence from Disaggregated Consumer Price Data. Journal of Money, Credit and Banking, 41(s1), 101-120. doi: 10.1111/j.1538-4616.2008.00200.x Recuperado de http://onlinelibrary.wiley.com/doi/10.1111/j.1538-4616.2008.00200.x/abstract
Neely, C. J. & Rapach, D. E. (noviembre, 2011). International comovements in inflation rates and country characteristics. Journal of International Money and Finance, 30(7), 1471-1490. doi: 10.2139/ssrn.1195706 Recuperado de http://www.sciencedirect.com/science/article/pii/S0261560611001148
Torres, C. (2010). Velocidad de desinflación en economías con metas de inflación (Documento de Trabajo DEC-DIE-DT-018-2010). Recuperado de http://www.bccr.fi.cr/investigacioneseconomicas/politicamonetariaeinflacion/Vel ocidad_desinflacion_economias_con_metas_de_inflacion.pdf
Torres, C. (2012). Costa Rica: Determinación de cambios estructurales en el nivel de la tasa de inflación: periodo 1997-2011 (Documento de Trabajo DEC-DIE-DT-002-2012). Recuperado de http://www.bccr.fi.cr/investigacioneseconomicas/politicamonetariaeinflacion/DT- 02-2012_Determinacion_cambios_estructurales_inflacion1997-2011.pdf
Ward, M. (2001, 30 de enero al 2 de febrero). International Price Levels and Global Inflation (agenda ítem No 11). Recuperado del sitio de internet de Joint World Bank - OECD Seminar on Purchasing Power Parities http://www.oecd.org/std/prices-ppp/2424790.pdf
Downloads
Published
How to Cite
Issue
Section
License
This publication is subject to the Creative Commons License; therefore, its attributions and restrictions must be respected.
Authors publishing in this Journal accept the following conditions:
- Authors retain copyright ownership and give the Journal first publication right of the paper, which is registered with the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. This license allows third parties to use the published work provided it is sourced as firstly published in this Journal.
- Authors may enter into other independent and additional contractual agreements for the non-exclusive distribution of the article published in this Journal (e.g., to be included in an institutional repository or published in a book) provided it is clearly stated that the work was published in this Journal for the first time.
- Authors are allowed and recommended to publish their work on the Internet (for example, on institutional or personal pages) before and during the review and publication process, as it can lead to productive exchanges and a greater and faster dissemination of work published.
The Economía & Sociedad Journal, published by Universidad Nacional, is licensed under a Creative Commons Reconocimiento-NoComercial-CompartirIgual 4.0 Internacional License. Based on http://www.revistas.una.ac.cr/index.php/economia.
