Fiscal and Monetary Anchors for Price Stability: Evidence from Sub-Saharan Africa
IMF Working Papers, May 1, 2008
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- Fiscal and Monetary Anchors for Price Stability: Evidence from Sub-Saharan Africa
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Bibliographic details
- Authors: Alfredo Baldini, Marcos Poplawski Ribeiro
- Published: May 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451869811.001
Research question and model
- Presents a model of fiscal dominance with borrowing constraints.
- Focus: relative importance of fiscal and monetary determinants of inflation in a large number of sub-Saharan African countries.
- Analytical emphasis on the dynamic response of inflation to different shocks, including nominal public debt.
Key empirical findings
- Time coverage: 1980-2005.
- Evidence that a number of SSA countries were characterized throughout the period 1980-2005 by:
- chronic fiscally dominant regimes, with weak or no response of primary surpluses to public debt; or
- a consistent adoption of a monetary dominant regime.
- Some countries exhibited a lack of a clear monetary and fiscal policy regime.
- Changes in nominal public debt affect price variability via aggregate demand effects.
- Conclusion consistent with the fiscal theory of the price level: fiscal outcomes can be a direct source of inflation variability.
Subject areas and keywords
- Subject: Domestic debt, Fiscal policy, Inflation, Monetary base, Public debt
- Keywords: exchange rate, FD regime, monetary policy, WP
Publication and metadata (as reported)
- Authors: Alfredo Baldini, Marcos Poplawski Ribeiro
- Date: May 1, 2008
- Series: Working Paper No. 2008/121
- Issue: 121
- Volume: 2008
- Pages: 37
- DOI: https://doi.org/10.5089/9781451869811.001
- ISBN: 9781451869811
- ISSN: 1018-5941
- Stock No: WPIEA2008121
Alfredo Baldini and Marcos Poplawski Ribeiro, "Fiscal and Monetary Anchors for Price Stability: Evidence from Sub-Saharan Africa," IMF Working Paper No. 2008/121 (May 1, 2008).