Evaluating the Relationship between Consumer Price Index with Gasoline and Hog Prices in Vietnam

Pham Minh Thuy^1,

¹Institute of Economics and Finance, Academy of Finance, Hanoi, Vietnam

Cite this paper:
Pham Minh Thuy. Evaluating the Relationship between Consumer Price Index with Gasoline and Hog Prices in Vietnam. Journal of Finance and Economics. 2022; 10(3):57-61. doi: 10.12691/jfe-10-3-1

Abstract

This study examines the link between inflation with fuel prices and hog prices in the Vietnamese context using Error Correction Model (ECM). It reveals that the change in the current gasoline and hog prices will produce a positive effect on Consumer Price Index (CPI) values in the next month. Because of the high speed of adjusting CPI to long-term equilibrium, Vietnam’s CPI needs more than a month to reach this equilibrium. Taken together, these findings provide some suggestions for using the fluctuations in petroleum and hog prices as warning indicators for a more accurate CPI forecast in Vietnam. Moreover, it is recommended that other factors, for example, the changes in gasoline prices and hog prices, are added in predicting CPI.

Keywords:
consumer price index error correction model gasoline prices hog prices inflation forecasting

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