Sources of Inflation in Sub-Saharan Africa

February 1, 2007

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Format: Chicago

Shanaka J Peiris, and Régis Barnichon. Sources of Inflation in Sub-Saharan Africa, (USA: International Monetary Fund, 2007) accessed November 21, 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

This paper explores the sources of inflation in Sub-Saharan Africa by examining the relationship between inflation, the output gap, and the real money gap. Using heterogeneous panel cointegration estimation techniques, we estimate cointegrating vectors for the production function and the real money demand function to recover the structural output and money gaps for seventeen African countries. The central finding is that both gaps contain significant information regarding the evolution of inflation, albeit with a larger role played by the money gap. There is no significant evidence of asymmetry in the relationship.

Subject: Demand for money, Econometric analysis, Estimation techniques, Inflation, Money, Output gap, Potential output, Prices, Production

Keywords: Cointegration regression, Demand for money, Estimation techniques, Excess demand, Growth Accounting, Inflation, Inflation movement, Integration estimation technique, Money Demand, Money demand function, Money gap, Output gap, Output gap measure, Panel Cointegration, Panel money demand estimation, Phillips curve, Phillips Curve Panel GMM, Potential output, Sub-Saharan Africa, WP

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/032
Stock No:

WPIEA2007032
ISBN:

9781451865967
ISSN:

1018-5941

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