Relationship between Inflation and Monetary Indicators of Mongolia

摘要

Including quarterly data from 1994-2004, and based on the classical theory of money policy and several empirical research, we have modelled the econometric model that indicate the relationship between money supply, exchange rate and inflation via CPI in the case of Mongolia. A series of tests have been done regarding to the true model. A positive finding is that the money supply and exchange rate have highly effects on inflation. This result may be developed in further study for the inflation targeting policy in Mongolia.