IDEAS home Printed from https://ideas.repec.org/a/wam/journl/v20y2020i1ap1-21.html
   My bibliography  Save this article

Impact Of Disaggregated Public Expenditure On Inflation Rate In Selected African Countries: A Panel Cointegration Analysis

Author

Listed:
  • Favour Chidinma Onuoha

    (Department of Economics, Evangel University, Akaeze, Ebonyi State, Nigeria.)

  • George Okorie

    (Monetary Policy Department, Central Bank of Nigeria, Abuja, Nigeria.)

Abstract

The study examined the long run association between disaggregated public expenditure and inflation rate in selected African countries with data spanning 1990-2019. The study employed a panel cointegration technique and estimated the cointegrating relationship using the Fully Modified OLS (FMOLS), and Dynamic OLS (DOLS) proposed and advanced by Pedroni (1996, 2001) and Kao and Chiang (2001). The findings from the cointegration result reveal the existence of a long run equilibrium relationship among the variables. Also, the panel dynamic OLS revealed that a 1percent change in infrastructure (capital) and defense expenditures leads to about 0.56 percent and 0.27 percent incremental change in inflation rate respectively. On the other hand, expenditure on education has a positive and an insignificant relationship with inflation, while expenditure on health has an inverse but insignificant influence on inflation rate in the region within the period under study. The study recommends that public expenditure on infrastructure in the selected African countries be appropriately channeled to stimulate investment and production, thereby stabilizing prices.

Suggested Citation

  • Favour Chidinma Onuoha & George Okorie, 2020. "Impact Of Disaggregated Public Expenditure On Inflation Rate In Selected African Countries: A Panel Cointegration Analysis," West African Journal of Monetary and Economic Integration, West African Monetary Institute, vol. 20(1a), pages 1-21, June.
    • Handle: RePEc:wam:journl:v:20:y:2020:i:1a:p:1-21
    as

    Download full text from publisher

    File URL: http://www.wami-imao.org/RePEc/articles/ImpactofDisaggregatedPublicExpenditureonInflationRateinSelectedAfricanCountries_vol20no1a_paper1.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Health; Infrastructure; Defense; Inflation; PFMOLS; PDOLS;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wam:journl:v:20:y:2020:i:1a:p:1-21. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MOHAMED FOFANA (email available below). General contact details of provider: https://edirc.repec.org/data/wamingh.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.