IMPORTS AND DOMESTIC INFLATION IN LATIN AMERICA

Abstract

In spite of the large volume of empirical evidence in favor of the monetary explanation of inflation, in many circles the phenomenon is still commonly attributed to other causes. A popular view, both at the level of financial press as well as in academic discussions, holds that the sustained and continuous rise in a country's internal prices is due in part, or even largely, to the increase in import prices. This view, which we will denote as the “import‐inflation hypothesis,” has many variants which are routinely stated in both official and private publications. Some variants stress the relevance of specific imports, particularly petroleum in recent years. The view is also reflected in the exagerated resistance to currency devaluations in countries with balance of payments problems.

Citation

Cole, J.H. (1986), "IMPORTS AND DOMESTIC INFLATION IN LATIN AMERICA", Studies in Economics and Finance, Vol. 10 No. 1, pp. 72-78. https://doi.org/10.1108/eb028664