IMF paper offers alternative explanation for Venezuelan inflation
Working paper argues fall in oil prices combined with restrictions in foreign exchange fuels inflation
A sharp fall in oil revenues combined with foreign exchange rationing in Venezuela has led to the "steep" rise in inflation, a working paper published by the International Monetary Fund shows.
Using a stylised general equilibrium model, Valerie Cerra argues the explanation for hyperinflation where "a rise in inflationary expectations is self-reinforcing and imposes a strong negative demand" is not the best fit for Venezuela.
Instead she explains how the "plummet" in oil prices led to a "massive
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