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Sources of Inflation in Sub-Saharan Africa


  • Régis Barnichon
  • Shanaka J. Peiris


This paper explores the sources of inflation in Sub-Saharan Africa by examining the relationship between inflation, the output gap and the real money gap. Using heterogeneous panel co-integration estimation techniques, we estimate co-integrating vectors for the production function and the real money demand function to recover the structural output and money gaps for 17 African countries. The central finding is that both gaps contain significant information regarding the evolution of inflation, albeit with a larger role played by the money gap. There is no significant evidence of asymmetry in the relationship. Copyright 2008 The author 2008. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email:, Oxford University Press.

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  • Régis Barnichon & Shanaka J. Peiris, 2008. "Sources of Inflation in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 17(5), pages 729-746, November.
  • Handle: RePEc:oup:jafrec:v:17:y:2008:i:5:p:729-746

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    References listed on IDEAS

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    Cited by:

    1. Nkonya, Ephraim & Place, Frank & Pender, John & Mwanjololo, Majaliwa & Okhimamhe, Appollonia & Kato, Edward & Crespo, Susana & Ndjeunga, Jupiter & Traore, Sibiry, 2011. "Climate risk management through sustainable land management in Sub-Saharan Africa:," IFPRI discussion papers 1126, International Food Policy Research Institute (IFPRI).
    2. Nguyen, Anh D.M. & Dridi, Jemma & Unsal, Filiz D. & Williams, Oral H., 2017. "On the drivers of inflation in Sub-Saharan Africa," International Economics, Elsevier, vol. 151(C), pages 71-84.
    3. Loening, Josef L. & Durevall, Dick & Ayalew Birru, Yohannes, 2009. "Inflation Dynamics and Food Prices in an Agricultural Economy: The Case of Ethiopia," Working Papers in Economics 347, University of Gothenburg, Department of Economics.
    4. Kenji Moriyama, 2008. "Investigating Inflation Dynamics in Sudan," IMF Working Papers 08/189, International Monetary Fund.
    5. World Bank, 2010. "Sub-Saharan Africa - Managing Land in a Changing Climate : An Operational Perspective for Sub-Saharan Africa," World Bank Other Operational Studies 2874, The World Bank.
    6. John Thornton, 2008. "Money, Output And Inflation In African Economies," South African Journal of Economics, Economic Society of South Africa, vol. 76(3), pages 356-366, September.
    7. Tidiane Kinda, 2011. "Modeling Inflation in Chad," IMF Working Papers 11/57, International Monetary Fund.
    8. Dridi, Jemma & Nguyen, Anh D. M., 2017. "Inflation Convergence In East African Countries," MPRA Paper 80393, University Library of Munich, Germany.
    9. James Heintz & Léonce Ndikumana, 2010. "Is There a Case for Formal Inflation Targeting in Sub-Saharan Africa?," Working Papers wp218, Political Economy Research Institute, University of Massachusetts at Amherst.
    10. Durevall, Dick & Loening, Josef L. & Ayalew Birru, Yohannes, 2013. "Inflation dynamics and food prices in Ethiopia," Journal of Development Economics, Elsevier, vol. 104(C), pages 89-106.
    11. Dick Durevall & Bo Sjö, 2012. "Working Paper 151 - The Dynamics of Inflation in Ethiopia and Kenya," Working Paper Series 400, African Development Bank.
    12. International Monetary Fund, 2009. "Uganda and Rwanda; Selected Issues," IMF Staff Country Reports 09/36, International Monetary Fund.
    13. Hamid R Davoodi & S. V. S. Dixit & Gabor Pinter, 2013. "Monetary Transmission Mechanism in the East African Community; An Empirical Investigation," IMF Working Papers 13/39, International Monetary Fund.
    14. Stephen A. O'Connell, 2011. "Towards a Rule-based Approach to Monetary Policy Evaluation in Sub-Saharan Africa-super- †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 20(suppl_2), pages -66, May.

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