wealth. Domestic price inflation is affected by imported inflation including currency depreciation (a pass through effect …

model for M3, GNP, an inflation rate and an interest rate spread variable to represent opportunity costs of holding money …. Furthermore, import price inflation is added as an exogenous variable. The model is used to analyze the relation between money … growth and inflation by means of an impulse response analysis …

regime driven by the exchange rate and a third one with inflation targeting. The result is a CVAR with constant long … framework, inflation dynamics in Mexico since the country abandoned the gold standard. The model encompasses known results … parsimonious, it does not require inflation lags nor dummy variables. It also displays a very good pseudo out-of-sample forecasting …