Lags in transmission of inflation - some preliminary estimates

Abstract

This paper provides some preliminary estimates of the structure of the lags in the relationships between the quarterly proportionate rates of change of the consumer price index, wholesale price index, export unit value index and import unit value index, using the Almon procedure. The relationship between the consumer price index and the UK retail price index is also investigated. The data period is 1962 (1) to 1974 (2). The lag structures o f the relationships between the consumer price index and the other Irish price indices are similar and may be rationalised in terms of the distinction between consumer and capital goods; they indicate that the imposition of geometrically declining lag structures may be inappropriate. However, these and especially the remaining relationships require further investigation before they could be used for policy and forecasting purposes.