Abstract

ESCOBAR CABA, Luis Fernando.   Dynamic fluctuations between Money and inflation for Bolivia. Oikos Polis [online]. 2016, vol.1, n.1, pp. 2-49. ISSN 2415-2250.

Abstract: The purpose of this paper is to assess the dynamic relationship between cyclical fluctuations in the money supply and inflation. By filtering time series are found cyclical components for the series, various measures of money (the money supply, the monetary base, the monetary aggregate M1, M2, M3 and M4) the global consumer prices index decompose (CPI ), and the core consumer prices index (IPCS). The sample consist in data monthly series from 1980 (January) 2015 (April); however, eliminating initial samples and end a final sample from 1986 (January) was obtained until 2013 (April). Overall, the results indicated that inflation is contemporary to the monetary aggregate M1 (stronger partnership in the same period); Also, inflation is the monetary aggregate M2 (at its maximum positive association for two months). The dynamic pro file indicates that the relationship between money supply and inflation has changed over time: 1) strong degree from mid of 80's to early 90's; 2) with a weak-moderate relationship since the mid of-90s until 2005; 3) with a transition from weak to strong degree grade from 2006 to 2013. However, in the short term (2005-2013) should be noted that inflation continues to open market operations (in a maximum positive association in two months), with a strong degree of relationship and stable trend.

Keywords : Cyclic fluctuations; money; inflation; neutrality of money.