Volume 2006, Issue 89
  • E-ISSN: 16840348


Relative prices and price stability have a recognized identity in economic theory and economic policy. In the last 50 years it is possible to configure numerous scenarios, according to the relative importance given by Latin American governments to price stability and relative prices. In the current debate, relative prices have been receiving less attention than price stability. Underlying this appears to be the belief that, with inflation low, the dispersion coefficient for variations in the prices of the goods and services included in the consumer price index should decline as well. The present article, in addition to describing the recent evolution of relative prices in a number of the region’s countries, shows that this belief does not accord with the facts, identifies homogeneous groups of goods and services at either end of the distribution and raises some questions about the implications of this last finding.

Related Subject(s): Economic and Social Development

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