Working Paper 108 - Is there a Case for Formal Inflation Targeting in Sub-Saharan Africa?
This paper examines the question of whetherinflation targeting monetary policy is anappropriate framework for sub-SaharanAfrican countries. The paper presents anoverview of inflation targeting, reviews thejustification for the regime, and summarizessome major critiques. Monetary policyresponses to inflation depend on the sourceof inflationary pressures. Therefore, thedeterminants of inflation in African countriesare investigated, using dynamic panel data,and the implications for inflation targetingare discussed. These issues are examined ingreater detail for the two African countrieswhich have formally adopted inflationtargeting, South Africa and Ghana. Theanalysis is placed in the context of the globaleconomic crisis. The paper concludes with adiscussion of alternative approaches tomonetary policies and the institutionalconstraints that would need to be addressedto allow central banks to play a strongerdevelopmental role in sub-Saharan Africancountries.
|Date of creation:||08 May 2010|
|Contact details of provider:|| Postal: 15 Avenue du Ghana P.O.Box 323-1002 Tunis-Belvedère, Tunisia|
Phone: (+216) 71 10 39 00
Fax: (225) 21.77.53
Web page: https://www.afdb.org/en/knowledge/publications/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nelson Barbosa-Filho, 2008. "Inflation targeting in Brazil: 1999-2006," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(2), pages 187-200.
- Roberto Frenkel & Lance Taylor, 2006. "Real Exchange Rate, Monetary Policy and Employment," Working Papers 19, United Nations, Department of Economics and Social Affairs.
- Thandika Mkandawire, 1999. "The political economy of financial reform in Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(3), pages 321-342.
- Atish Ghosh & Steven Phillips, 1998. "Warning: Inflation May Be Harmful to Your Growth," IMF Staff Papers, Palgrave Macmillan, vol. 45(4), pages 672-710, December.
- Kevin Nell, 2004. "The structuralist theory of imported inflation: an application to South Africa," Applied Economics, Taylor & Francis Journals, vol. 36(13), pages 1431-1444.
- Burdekin, Richard C.K. & Denzau, Arthur T. & Keil, Manfred W. & Sitthiyot, Thitithep & Willett, Thomas D., 2004.
"When does inflation hurt economic growth? Different nonlinearities for different economies,"
Journal of Macroeconomics,
Elsevier, vol. 26(3), pages 519-532, September.
- Richard C.K. Burdekin & Arthur T. Denzau & Manfred W. Keil & Thitithep Sitthiyot & Thomas D. Willett, "undated". "When Does Inflation Hurt Economic Growth? Different Nonlinearities for Different Economies," Claremont Colleges Working Papers 2000-22, Claremont Colleges.
- Joshua Aizenman & Michael Hutchison & Ilan Noy, 2008.
"Inflation Targeting and Real Exchange Rates in Emerging Markets,"
NBER Working Papers
14561, National Bureau of Economic Research, Inc.
- Aizenman, Joshua & Hutchison, Michael & Noy, Ilan, 2011. "Inflation Targeting and Real Exchange Rates in Emerging Markets," World Development, Elsevier, vol. 39(5), pages 712-724, May.
- Aizenman, Joshua & Hutchison, Michael M. & Noy, Ilan, 2008. "Inflation Targeting and Real Exchange Rates in Emerging Markets," Santa Cruz Department of Economics, Working Paper Series qt6d23q90v, Department of Economics, UC Santa Cruz.
- Joshua Aizenman & Michael Hutchison & Ilan Noy, 2008. "Inflation Targeting and Real Exchange Rates in Emerging Markets," Working Papers 200810, University of Hawaii at Manoa, Department of Economics.
- 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, 09.
- Oladipo Olajide, 2007. "Exchange Rate Pass-Through: A Case Study of a Small Open Economy," Global Economy Journal, De Gruyter, vol. 7(3), pages 1-26, October.
- Loening, Josef L. & Durevall, Dick & Birru, Yohannes A., 2009.
"Inflation dynamics and food prices in an agricultural economy : the case of Ethiopia,"
Policy Research Working Paper Series
4969, The World Bank.
- 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.
- Benjamin M. Friedman & Kenneth N. Kuttner, 1996.
"A Price Target for U.S. Monetary Policy? Lessons from the Experience with Money Growth Targets,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 27(1), pages 77-146.
- Benjamin M. Friedman & Kenneth N. Kuttner, 1996. "A price target for U.S. monetary policy? Lessons from the experience with money growth targets," Working Paper Series, Macroeconomic Issues WP-96-14, Federal Reserve Bank of Chicago.
- Goncalves, Carlos Eduardo S. & Salles, Joao M., 2008. "Inflation targeting in emerging economies: What do the data say?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 312-318, February.
- Robert Pollin & Mwangi wa Githinji, 2008. "An Employment-Targeted Economic Program for Kenya," Books, Edward Elgar Publishing, number 13219.
- Janine Aron & John Muellbauer, 2007.
"Review of Monetary Policy in South Africa since 1994,"
Journal of African Economies,
Centre for the Study of African Economies (CSAE), vol. 16(5), pages 705-744, November.
- Janine Aron & John Muellbauer, 2006. "Review of Monetary Policy in South Africa since 1994," CSAE Working Paper Series 2006-07, Centre for the Study of African Economies, University of Oxford.
When requesting a correction, please mention this item's handle: RePEc:adb:adbwps:245. 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)
If references are entirely missing, you can add them using this form.