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Modeling Inflation for Mali


  • Mame Astou Diouf


This paper investigates how consumer price inflation is determined in Mali for 1979-2006 along three macroeconomic explanations: (1) monetarist theories, emphasizing the impact of excess money supply, (2) the structuralist hypothesis, stressing the impact of supply-side constraints, and (3) external theories, describing the effects of foreign transmission mechanisms on a small open economy. The analysis makes use of cointegration techniques and general-to-specific modeling. Average national rainfall, and to a lesser extent deviations from monetary and external sector equilibrium are found to be the main long-run determinants of inflation. The paper offers policy recommendations for controlling inflation in Mali.

Suggested Citation

  • Mame Astou Diouf, 2007. "Modeling Inflation for Mali," IMF Working Papers 07/295, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:07/295

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    References listed on IDEAS

    1. Mohsin S. Khan & Axel Schimmelpfennig, 2006. "Inflation in Pakistan: Money or Wheat?," SBP Research Bulletin, State Bank of Pakistan, Research Department, vol. 2, pages 213-234..
    2. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    3. Gary G. Moser, 1994. "The Main Determinants of Inflation in Nigeria," IMF Working Papers 94/76, International Monetary Fund.
    4. Neil R. Ericsson, 1998. "Empirical modeling of money demand," Empirical Economics, Springer, vol. 23(3), pages 295-315.
    5. Jayne, Thomas S. & Mukumbu, Mulinge & Duncan, John & Staatz, John M. & Howard, Julie A. & Lundberg, Mattias K.A. & Aldridge, Kim & Nakaponda, Bethel & Ferris, John N. & Keita, Francis & Sanankoua, Abd, 1995. "Trends in Real Food Prices in Six Sub-Saharan African Countries," Food Security International Development Policy Syntheses 11327, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Jean-Claude Nachega, 2001. "Financial Liberalization, Money Demand, and Inflation in Uganda," IMF Working Papers 01/118, International Monetary Fund.
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    Cited by:

    1. Victor Osei, 2015. "Inflation Dynamics in Ghana," International Finance and Banking, Macrothink Institute, vol. 2(1), pages 38-59, June.
    2. Abiola, A.G & Olofin, O.P, 2008. "Foreign aid, food supply and poverty reduction in Nigeria - Examination of possible nexus," MPRA Paper 16263, University Library of Munich, Germany.
    3. Tidiane Kinda, 2011. "Modeling Inflation in Chad," IMF Working Papers 11/57, International Monetary Fund.
    4. Oulatta, Moon, 2016. "A Generic Theory of Price Determination," MPRA Paper 76014, University Library of Munich, Germany.
    5. Magda Kandil & Hanan Morsy, 2011. "Determinants Of Inflation In Gcc," Middle East Development Journal (MEDJ), World Scientific Publishing Co. Pte. Ltd., vol. 3(02), pages 141-158.
    6. 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.
    7. Dick Durevall & Bo Sjö, 2012. "Working Paper 151 - The Dynamics of Inflation in Ethiopia and Kenya," Working Paper Series 400, African Development Bank.
    8. LOENING, Josef & TAKADA, Hideki, 2008. "Inflationary Expectations In Ethiopia: Some Preliminary Results," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 8(2), pages 159-176.

    More about this item


    Demand for money; Real effective exchange rates; Money demand; Mali; Inflation; real exchange rate; food supply; cointegration; price inflation; terms of trade; money market;

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