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Inflation in the West African Countries. The Impact of Cocoa Prices, Budget Deficits, and Migrant Remittances

Author

Listed:
  • Jumah, Adusei

    (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria, and Department of Economics, University of Vienna, Vienna, Austria)

  • Kunst, Robert M.

    (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria, and Department of Economics, University of Vienna, Vienna, Austria)

Abstract

We verify whether cocoa prices could be a source of inflation in five countries of the West African region within a framework that includes other variables such as migrant remittances to the region and a fiscal policy variable represented by the government budget deficit. Unlike earlier studies that explicitly use money supply variables, the inclusion of migrant remittances enables us to examine the effect of an international capital flow variable on inflation. The results reveal that the influence of cocoa prices on consumer price inflation is strong and statistically significant. The influence of the budget deficit and the flow of migrant remittance variables on inflation are, however, weak.

Suggested Citation

  • Jumah, Adusei & Kunst, Robert M., 2007. "Inflation in the West African Countries. The Impact of Cocoa Prices, Budget Deficits, and Migrant Remittances," Economics Series 219, Institute for Advanced Studies.
    • Handle: RePEc:ihs:ihsesp:219
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    File URL: https://irihs.ihs.ac.at/id/eprint/1803
    File Function: First version, 2007
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    Cited by:

    1. Juan Carlos Cuestas & Estefanía Mourelle, 2009. "Inflation persistence and asymmetries: evidence for African countries," NBS Discussion Papers in Economics 2009/2, Economics, Nottingham Business School, Nottingham Trent University.
    2. Estefania Mourelle & Juan Carlos Cuestas & Luis Alberiko Gil‐alana, 2011. "Is There An Asymmetric Behaviour In African Inflation? A Non‐Linear Approach," South African Journal of Economics, Economic Society of South Africa, vol. 79(1), pages 68-90, March.

    More about this item

    Keywords

    Inflation; West Africa; Cocoa; Budget deficits; Remittances;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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