IDEAS home Printed from https://ideas.repec.org/p/adb/adbwps/2432.html
   My bibliography  Save this paper

Working Paper 305 - Inflation Dynamics In Post-Secession Sudan

Author

Listed:

Abstract

The objective of this working paper is to investigate the factors contributing to inflation in Sudan in the wake of South Sudan’s secession, which resulted in the loss of 75% of the country’s oil exports. The paper uses a single equation model in a Vector Error Correction Model (VECM) to investigate the determinants of inflation. The independent variables included in the model are money supply, the nominal effective exchange rate based on the parallel rate, credit to the private sector as a percentage of GDP, and crude oil prices. The results indicate that, in the long run, oil prices have a negative effect on inflation while money supply, credit to private sector, and nominal effective exchange rate have positive effects. This underscores the need to manage money supply, the exchange rate, and credit to the private sector, all of which can be influenced by the monetary authorities—that is, the Central Bank of Sudan.JEL classification: E310 E520 E58Keywords: Inflation, money supply, exchange rate, credit, oil prices Sudan, long-run, VECM.

Suggested Citation

  • Suwareh Darbo & Amandine Nakumuryango, 2018. "Working Paper 305 - Inflation Dynamics In Post-Secession Sudan," Working Paper Series 2432, African Development Bank.
  • Handle: RePEc:adb:adbwps:2432
    as

    Download full text from publisher

    File URL: https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/WPS_No._305_Inflation_Dynamics_In_Post-Secession_Sudan_2.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Mohanty, Deepak & John, Joice, 2015. "Determinants of inflation in India," Journal of Asian Economics, Elsevier, vol. 36(C), pages 86-96.
    2. Gary G. Moser, 1995. "The Main Determinants of Inflation in Nigeria," IMF Staff Papers, Palgrave Macmillan, vol. 42(2), pages 270-289, June.
    3. repec:eee:jimfin:v:82:y:2018:i:c:p:71-96 is not listed on IDEAS
    4. repec:fip:fedkmb:00064 is not listed on IDEAS
    5. Ruzima, Martin & Veerachamy, P, 2015. "A Study on Determinants of Inflation in Rwanda from 1970-2013," MPRA Paper 73222, University Library of Munich, Germany.
    6. Fatih Ozatay, 1992. "Monetary Policy and Inflation Stabilization in Turkey," Discussion Papers 9209, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    7. Suna Korkmaz, 2015. "Impact of Bank Credits on Economic Growth and Inflation," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 5(1), pages 1-4.
    8. Onis, Ziya & Ozmucur, Suleyman, 1990. "Exchange rates, inflation and money supply in Turkey : Testing the vicious circle hypothesis," Journal of Development Economics, Elsevier, vol. 32(1), pages 133-154, January.
    9. I, Sahadudheen, 2012. "A cointegration and error correction approach to the determinants of inflation in India," MPRA Paper 65561, University Library of Munich, Germany, revised 2012.
    10. Choi, Sangyup & Furceri, Davide & Loungani, Prakash & Mishra, Saurabh & Poplawski-Ribeiro, Marcos, 2018. "Oil prices and inflation dynamics: Evidence from advanced and developing economies," Journal of International Money and Finance, Elsevier, vol. 82(C), pages 71-96.
    11. van Wijnbergen, Sweder, 1989. "External Debt, Inflation, and the Public Sector: Toward Fiscal Policy for Sustainable Growth," World Bank Economic Review, World Bank Group, vol. 3(3), pages 297-320, September.
    12. Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
    13. Søren Johansen & Katarina Juselius, 1988. "Hypothesis Testing for Cointegration Vectors: with Application to the Demand for Money in Denmark and Finland," Discussion Papers 88-05, University of Copenhagen. Department of Economics.
    14. A. Erinc Yeldan, 1993. "Conflicting Interests and Structural Inflation: Turkey, 1980-1990," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(3), pages 303-327.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:adb:adbwps:2432. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Adeleke Oluwole Salami). General contact details of provider: http://edirc.repec.org/data/afdbgci.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.