Abstract
This work aims to analyze, from a multisector point of view, the Brazilian inflationary process between 2000 and 2009. In order to do so, we present a structural decomposition analysis methodology to be applied to the Input-Output Price Model. Based on the assumption that under normal conditions of a market economy inflation is mainly caused by the increase in production costs, we evaluate the results for the Brazilian economy during the period 2001-2009. The period is divided into three phases. In the first, 2001-2003, the major cause of Brazilian inflation is the nominal exchange rate. The second, 2004-2005, sees increases in the importance of commodity prices and wages. In the last phase, 2006-2009, labor cost exerts the most important influence on the inflation rate, and due to the behavior of income distributive variables, the service sector became an important factor in the explanation of the inflation rate in the Brazilian economy.
Keywords:
Cost push inflation; Structural decomposition analysis; Input-output price model matrix