AN ECONOMETRIC ANALYSIS OF FACTORS CONTRIBUTING TO INFLATIONARY PRESSURE IN THE REPUBLIC OF UZBEKISTAN DURING THE PERIOD OF STRUCTURAL REFORMS (2018–2025)
Keywords:
inflation, money supply, exchange rate, pass-through effect, econometric modeling, spurious regression, structural reforms, Uzbekistan.Abstract
This article examines the macroeconomic determinants of inflationary processes in the Republic of Uzbekistan amid large-scale economic transformation and liberalization. Based on annual statistical data for 2018–2025, using 2017 as the base year, a three-variable linear regression model of growth rates was constructed. The rates of national currency devaluation and the growth rate of the M2 money supply were tested as explanatory factors. The simulation results demonstrate a consistent positive relationship between inflation and both factors, confirming the synergy between the monetarist concept and the theory of exchange rate pass-through. The paper provides a detailed decomposition of the structural shock caused by the 2018 currency liberalization, which explains the nonlinear nature of the relationship between devaluation and the consumer price index. Recommendations are formulated for the Central Bank of the Republic of Uzbekistan on improving inflation targeting mechanisms.
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