Inflation determination in an open economy: the case of Barbados

Author(s): Whitehall, Peter H (1988)

Created 26 Jul, 1988
Categories Working Papers
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This paper develops a framework for constructing models of retail price determination in an open economy using insights from the neo-monetarist and neo-structuralist approaches. It was found that the neo-monetarist approach, (modified by the inclusion of indirect tax and imported inflation variables), provided the best forecasts of the level of inflation within sample and out of sample according to the usual criteria. However, the results were further improved when the separate forecasts of the neo-monetarist and neo-structuralist approaches were combined into a composite model. (Previous title: Collection of unpublished research papers. Presented at the Annual Conference of the Business Association of Latin America Studies, Boca Raton Fort Lauderdale, Florida, February 1989.)

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