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Fiscal and Monetary Determinants of Inflation in Low-Income Countries: Theory and Evidence from Sub-Saharan Africa-super- †


  • Alfredo Baldini
  • Marcos Poplawski-Ribeiro


This paper presents a model of fiscal dominance with borrowing constraints and provides new evidence for a large number of Sub-Saharan African countries on the relative importance of fiscal and monetary determinants of inflation. Based on different empirical tests, results show that half of the twenty-two SSA countries were characterised in 1980–2005 by lack of clear anti-inflationary monetary and fiscal policies. The other half of the sample was characterised by either a fiscal-dominant regime, with weak or no response of primary surpluses to public debt, or by consistent adoption of a monetary-dominant regime. Copyright 2011 , Oxford University Press.

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  • Alfredo Baldini & Marcos Poplawski-Ribeiro, 2011. "Fiscal and Monetary Determinants of Inflation in Low-Income Countries: Theory and Evidence from Sub-Saharan Africa-super- †," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 20(3), pages 419-462, June.
  • Handle: RePEc:oup:jafrec:v:20:y:2011:i:3:p:419-462

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    References listed on IDEAS

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    Cited by:

    1. Jaromir Benes & Andrew Berg & Rafael A Portillo & Mai Dao & Alfredo Baldini, 2012. "Monetary Policy in Low Income Countries in the Face of the Global Crisis; The Case of Zambia," IMF Working Papers 12/94, International Monetary Fund.
    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. Lledó, Victor & Poplawski-Ribeiro, Marcos, 2013. "Fiscal Policy Implementation in Sub-Saharan Africa," World Development, Elsevier, vol. 46(C), pages 79-91.
    4. Carlos Caceres & Marcos Poplawski-Ribeiro & Darlena Tartari, 2013. "Inflation Dynamics in the CEMAC Region," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(2), pages 239-275, March.
    5. Dridi, Jemma & Nguyen, Anh D. M., 2017. "Inflation Convergence In East African Countries," MPRA Paper 80393, University Library of Munich, Germany.
    6. Forgha Godfrey NJIMANTED & Daniel AKUME & Emmanuel Mbella MUKETE, 2016. "The Impact of Key Monetary Variables on the Economic Growth of the CEMAC Zone," Expert Journal of Economics, Sprint Investify, vol. 4(2), pages 54-67.
    7. 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.

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