Inflation legacies: Early-life crises and their impact on policy preferences and money growth in Africa

This paper investigates whether early-life exposure to inflation crises shapes monetary policy preferences among African central bankers. While prior research explores experience-based learning in developed economies, this study is the first to examine how formative inflation crises influence monetary preferences in Africa. We develop a Barro-Gordon–style model predicting that exposure to inflation crises during formative years creates an anti-inflationary bias. Using data on 30 African countries from 1990 to 2022, we estimate dynamic fixed-effects and GMM panel models of money growth. Our analysis reveals that money growth is significantly lower when central bankers have early-life inflation crisis experience, reflecting a “learning effect” that strengthens with repeated exposure. This effect persists after controlling for education and professional background and is most pronounced in countries with greater central bank independence. The findings indicate that early-life exposure can be a valuable criterion in selecting central bankers who are more likely to uphold anti-inflationary policies.