Modeling of the causal mechanism of inflation dynamics

The article discusses the problems of modeling inflation processes and presents the main methods of statistical analysis of inflation processes. Econometric modeling is recognized as the most effective method for studying inflation processes, including time series models as a tool for forecasting inflation dynamics. The use of autoregressive models makes it possible to effectively describe inflation processes, and the use of an error correction mechanism, in turn, ensures the accuracy of calculations. Modeling the cause-and-effect mechanism of inflation dynamics seems interesting from the perspective of studying general issues of inflation processes. The article examines the relationship between the main macroeconomic aggregators based on the proposed mathematical models. It is shown that fuel prices (dynamics of prices for coal, electricity and oil, weighted in the total by the share of industry significance) depend on the level of consumer prices (by 1%). The presence of such feedback contradicts the assertion of the cost-push inflation theory that consumer prices rise due to rising resource prices. The corrective mechanism operates in such a way that it becomes possible to explain the dynamics of wages. A change in the price level entails a change in wages. This conclusion is consistent with the theory of demand inflation. The study of the theoretical aspects of cost-push inflation leads to the conclusion about the influence of foreign exchange rates on consumer prices. It was found that there is a mutual influence at the 1% level of consumer prices and the exchange rate.