Dynamics of inflation and monetary aggregates in Belarus: stationary process or a random correlation?

This paper looks at the dynamic properties of inflation (based on the GDP deflator or implicit price deflator and the consumer price index) and the growth of the different monetary aggregates (M0, M1, M2 and M3) in Belarus. Analysis of the order of integration of these indicators (monthly and quarterly) for 1992-2002. showed that the rate of inflation, calculated on the basis of consumer price index, and the growth of the monetary aggregates M0, M1, M2 are stationary variables with a changing median (Pelipas (2003)). There was, however, one distinct structural shift in the 1-2 quarters of 1995. This study examines the dynamics of the above indicators from1995-2009 in detail.