The Sources of Inflation in Egypt: A Multivariate Co-integration Analysis
AbstractThe aim of this paper is to empirically investigate the sources of inflation in Egypt. For this, price dynamics is herein represented by a vector error-correction model, which we use to test for the existence of a long-run relationship between the consumer price index, real gross domestic product (GDP), the exchange rate, interest rate, money supply and world prices. Then using the augmented VAR approach, we test for Granger non-causality between the different variables and inflation. The main results that are of interest to monetary policy in Egypt suggest that structural reforms based on improving the country’s productive capacity, shrinking the budget deficit and credit to the government, are crucial for controlling inflation.
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Bibliographic InfoArticle provided by De Gruyter in its journal Review of Middle East Economics and Finance.
Volume (Year): 3 (2005)
Issue (Month): 3 (December)
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Web page: http://www.degruyter.com
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- Mohamed A. Osman & Rosmy Jean Louis & Faruk Balli, 2009.
"Output gap and inflation nexus: the case of United Arab Emirates,"
International Journal of Economics and Business Research,
Inderscience Enterprises Ltd, vol. 1(1), pages 118-135.
- Osman, Mohammad & Jean Louis, Rosmy & Balli, Faruk, 2008. "Output gap and inflation nexus: the case of United Arab Emirates," MPRA Paper 34006, University Library of Munich, Germany, revised 2009.
- Al-Shawarby, Sherine & Selim, Hoda, 2012. "Are international food price spikes the source of Egypt's high inflation ?," Policy Research Working Paper Series 6177, The World Bank.
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