EuroEconomica, Vol 33, No 2 (2014)

Abstract

This study is a first attempt to investigate whether the inflation rates for Albania follow a normal distribution and the inflation process is a fair game. The general results of the study include:

1. The Kolmogorov’s Central Limit Theorem is not valid for Albania’s monthly inflation rates over the period January 1994 – December 2010 at the 99.9 % confidence level.
2. The inflation process for Albania, relates to the monthly inflation rates, over January 1994 – December 2010 is an unfair game.
3. The Kolmogorov’s Central Limit Theorem is not valid for Albania’s quarterly inflation rates over the period January 1996 – December 2010 at the 99.5 % confidence level.
4. The inflation process for Albania, related to the quarterly inflation rates over January 1996 – December 2010 is an unfair game.

The observed extreme departures of inflation rates from normal distribution and the unfair game inflation process for Albania over the specified periods seems to have as a surprise to some international scientists and politicians.