Determinants of Recent Inflation in Ethiopia
AbstractAbstract Inflation has been a rising in Ethiopia during recent years, mainly fueled by food inflation. In the study, an analysis of the determinants of inflation was made using quarterly data during 1997/98 – 2007/08. The research employed Co-integration regression after finding that the variables included in the model were cointegrated. The results from the study depicts that inflation was significantly affected by money supply growth (positively) and domestic output (negatively). Though expected to have a significant effect; fluctuations in the official exchange rate, gas oil price, and budget deficit were found to have an insignificant impact on the inflation rate. Surprisingly though expected to have an insignificant impact, lending rate was found to have a significant impact on the inflation rate. The study concludes with recommendations to avert inflation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 29668.
Date of creation: 31 Aug 2008
Date of revision:
Inflation; Money Supply; Government Expenditure; GDP; Real Interest Rates;
Find related papers by JEL classification:
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- repec:imf:imfeci:2 is not listed on IDEAS
- Marc Zelmer & Andrea Schaechter & Mark R. Stone & Alina Carare, 2002. "Establishing Initial Conditions in Support of Inflation Targeting," IMF Working Papers 02/102, International Monetary Fund.
- Catao, Luis A.V. & Terrones, Marco E., 2005.
"Fiscal deficits and inflation,"
Journal of Monetary Economics,
Elsevier, vol. 52(3), pages 529-554, April.
- Mark J Flanagan & Felix Hammermann, 2007. "What Explains Persistent Inflation Differentials Across Transition Economies?," IMF Working Papers 07/189, International Monetary Fund.
- Chris Crowe, 2004.
"Inflation, Inequality and Social Conflict,"
Money Macro and Finance (MMF) Research Group Conference 2004
69, Money Macro and Finance Research Group.
- Eva Gutierrez, 2003. "Inflation Performance and Constitutional Central Bank Independence," IMF Working Papers 03/53, International Monetary Fund.
- Keith M. Carlson, 1980. "The lag from money to prices," Review, Federal Reserve Bank of St. Louis, issue Oct, pages 3-10.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.