Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/211745
Authors: 
Ripatti, Antti
Vilmunen, Jouko
Year of Publication: 
1995
Series/Report no.: 
Bank of Finland Discussion Papers No. 32/1995
Publisher: 
Bank of Finland, Helsinki
Abstract: 
Under certain assumptions, the permanent income model yields the result that prices of different products share common stochastic trends.We construct four price series from the components of the consumer price index, combine this four variable system with various macroeconomic variables, such as broad money (M2), nominal exchange rates, import and export prices in domestic currency etc., with the ultimate hope of capturing empirical regularities between this price structure and the proposed macroeconomic information.It is found that broad money, money market and bond yield indices, nominal exchange rates and import prices contain long-run information about the price level.We also find that the common trends of price groups cointegrate with the broad monetary aggregate and the money market yield index, indicating that these variables might be the driving forces of underlying inflation.
Persistent Identifier of the first edition: 
ISBN: 
951-686-475-9
Document Type: 
Working Paper

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