Albania's inflation driven by money supply, exchange rate, and real income.
The study looked at what causes inflation in Albania. They found that inflation is affected by seasonal patterns, with peaks and troughs linked to agriculture seasons. Money supply and exchange rates can predict changes in prices, with government credit influencing certain prices. In the long run, inflation goes up with more money in circulation and a weaker exchange rate, but goes down with higher real income. Inflation adjusts to its normal level quickly, with the exchange rate affecting it a month later, and real income and money supply affecting it after two and four months, respectively.