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Macroeconomics Determinants of Saudi Arabia's Inflation 2000-2016: Evidence and Analysis

Author

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  • Sana Naseem

    (College of Business Administration, Al Yamamah University, Riyadh, Kingdom of Saudi Arabia.)

Abstract

This study deals with rising prices in Saudi Arabia from 2000 to 2016. Inflation in an open economy can be influenced by both domestic and global factors. The aim of the paper is to examine macroeconomics determinants of inflation in Saudi Arabia. The study has employed regression model, in which the dependent variable is inflation (CPI) and independent variables are money supply, fixed exchange rate against U.S dollar, oil prices, import value, export value and unemployment. Empirical result shown that Money supply, fixed exchange rate against U.S dollar, import value, export value, and oil prices have statistical significance with inflation in Saudi Arabia except unemployment that does not directly predict inflation rates in Saudi Arabia. It has been concluded that effect of domestic factors on Saudi inflation eroded over the last 13 years as Saudi inflation become more globalized.

Suggested Citation

  • Sana Naseem, 2018. "Macroeconomics Determinants of Saudi Arabia's Inflation 2000-2016: Evidence and Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 8(3), pages 137-141.
    • Handle: RePEc:eco:journ1:2018-03-17
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    References listed on IDEAS

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    1. Akinsola Foluso A. & Odhiambo Nicholas M., 2017. "Inflation and Economic Growth: a Review of The International Literature," Comparative Economic Research, Sciendo, vol. 20(3), pages 41-56, September.
    2. Magda Kandil & Hanan Morsy, 2011. "Determinants Of Inflation In Gcc," Middle East Development Journal (MEDJ), World Scientific Publishing Co. Pte. Ltd., vol. 3(02), pages 141-158.
    3. Fernando Alvarez & Robert E. Lucas & Warren E. Weber, 2001. "Interest Rates and Inflation," American Economic Review, American Economic Association, vol. 91(2), pages 219-225, May.
    4. A. W. Phillips, 1958. "The Relation Between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861–1957," Economica, London School of Economics and Political Science, vol. 25(100), pages 283-299, November.
    5. Hesham Alogeel & Maher Hasan, 2008. "Understanding the Inflationary Process in the GCC Region: The Case of Saudi Arabia and Kuwait," IMF Working Papers 2008/193, International Monetary Fund.
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    More about this item

    Keywords

    Saudi Arabia; Inflation; Macroeconomics Determinants; global factors.;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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