Determinants of Inflation in Mozambique

October 1, 1997

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Format: Chicago

Angel J. Ubide Determinants of Inflation in Mozambique, (USA: International Monetary Fund, 1997) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Mozambique’s inflation rate was consistently high until 1995, and then plunged in 1996 to 17 percent from 70 percent in 1994. This paper suggests that Mozambique’s inflation pattern is a combination of a “fundamental” trend set by economic policies, seasonal behavior that follows closely that of agriculture, and a collection of irregular events that corresponds mainly to agroclimatic conditions. The empirical results show that the marked tightening of monetary policy in 1996 was the ultimate reason for the control of inflation in 1996, and hence seems to correspond to a change in the “fundamental” trend of inflation that may have long-lasting effects.

Subject: Agricultural production, Consumer price indexes, Exchange rates, Foreign exchange, Inflation, Monetary base, Prices, Production, Purchasing power parity

Keywords: Africa, Agricultural production, Consumer price indexes, Error-correction term, Exchange rates, Forecasting inflation, Inflation, Inflation determination, Inflation equation, Inflation movement, Inflation rate, Inflation transmission mechanism, Moving average, Purchasing power parity, Rand exchange rate, Unobserved components, VAR, WP

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1997/145
Stock No:

WPIEA1451997
ISBN:

9781451856507
ISSN:

1018-5941

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