Inflation targeting and inflation expectations in Mexico

12Citations
Citations of this article
18Readers
Mendeley users who have this article in their library.
Get full text

Abstract

In this article we analyse inflation expectations in Mexico. After a review of the theoretical and empirical literature, we apply unit root, normality and cointegration tests to the data provided by Banco de México (Banxico) in the Survey on the Expectations of the Private Sector Economics Specialists. Our results reject the null hypothesis of normality for inflation expectations over the period 2004:01-2011:12. The exchange rate has become one of the most relevant variables in the transmission mechanism of monetary policy in a small open economy. In this regard, we show the existence of a long-run relationship between nominal exchange rate and interest rate where inflation expectations matter for long-term dynamics. © 2013 Taylor & Francis.

Cite

CITATION STYLE

APA

Carrasco, C. A., & Ferreiro, J. (2013). Inflation targeting and inflation expectations in Mexico. Applied Economics, 45(23), 3295–3304. https://doi.org/10.1080/00036846.2012.707772

Register to see more suggestions

Mendeley helps you to discover research relevant for your work.

Already have an account?

Save time finding and organizing research with Mendeley

Sign up for free