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Openness and Inflation: Evidence from Time Series Data = Dışa Açıklık ve Enflasyon: Zaman Serileri Verileri ile Bir Kanıt

Author(s): Muhammad ZAKARIA

Journal: Dogus University Journal
ISSN 1302-6739

Volume: 11;
Issue: 2;
Start page: 313;
Date: 2010;
Original page

Keywords: Openness | Inflation | Exchange Rate Regime | Dışa Açıklık | Enflasyon | Kambiyo Rejimi

The paper empirically examines relationship between trade openness and inflation in Pakistan using annual time-series data for the period 1947 to 2007. The empirical analysis shows that a positive relation holds between trade openness and inflation in Pakistan. The results are robust to controlling for other inflation determining variables and performing sensitivity analysis. Flexible exchange rate regime and an increase in the level of development inflate domestic inflation. Other control variables i.e. money supply, fiscal deficit, exchange rate depreciations, foreign inflation, terms of trade, foreign debt and democracy significantly affect inflation in the expected directions.
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