A Dynamic Model of Inflation for Kenya, 1974-1996
AbstractThis paper analyses the dynamics of inflation in Kenya during 1974–96, a period characterized by external shocks and internal disequilibria. By developing a parsimonious and empirically constant error correction model the paper finds that the exchange rate, foreign prices, and terms of trade have long-run effects on inflation, while the money supply and interest rate only have short-run effects. The dynamics of inflation are also found to be influenced by food supply constraints. Moreover, inertia is important for the period up to 1993, when about 40 percent of current inflation was transmitted to the next quarter. After 1993 inertia drops to about 10 percent.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 99/97.
Date of creation: 01 Jul 1999
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Other versions of this item:
- Durevall, Dick & Ndung'u, Njuguna S., 1998. "A Dynamic Model of Inflation for Kenya 1974 - 1996," Working Papers in Economics, University of Gothenburg, Department of Economics 7, University of Gothenburg, Department of Economics.
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
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- Asghar Shahmoradi & Hamed Shakouri, 2010. "Investigation on the Impact of an Energy Desubsidization Shock on the General Price Index Via a Nonlinear Inflation Model: Case of Iran," Iranian Economic Review, Economics faculty of Tehran university, Economics faculty of Tehran university, vol. 15(3), pages 33-51, fall.
- Loening, Josef L. & Durevall, Dick & Birru, Yohannes A., 2009.
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- Durevall, Dick & Loening, Josef L. & Birru, Yohannes A., 2010. "Inflation Dynamics and Food Prices in Ethiopia," Working Papers in Economics, University of Gothenburg, Department of Economics 478, University of Gothenburg, Department of Economics, revised 03 Jun 2013.
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