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Inflation persistence in African countries: Does inflation targeting matter?

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  • Phiri, Andrew

Abstract

This study investigates inflation persistence in annual CPI inflation collected between 1994 and 2014 for 46 African countries. We group these countries into panels according to whether they are inflation targeters or not and conduct estimations for pre and post inflation targeting periods. Interestingly enough, we find that inflation persistence was much higher for inflation targeters in periods before adopting their inflation targeting regimes and inflation persistence dropped by 40 percent for these countries after adopting the policy frameworks. For non-inflation targeters inflation persistence has increased by almost 290 percent between the two time periods.

Suggested Citation

  • Phiri, Andrew, 2016. "Inflation persistence in African countries: Does inflation targeting matter?," MPRA Paper 69153, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:69153
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    References listed on IDEAS

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    1. Naveen Srinivasan & Pankaj Kumar, 2012. "Inflation Persistence: Does Credibility of the Monetary Regime Matter?," Economics Bulletin, AccessEcon, vol. 32(4), pages 2944-2954.
    2. Svensson, Lars E. O., 1999. "Inflation targeting as a monetary policy rule," Journal of Monetary Economics, Elsevier, vol. 43(3), pages 607-654, June.
    3. Svensson, Lars E. O., 2002. "Inflation targeting: Should it be modeled as an instrument rule or a targeting rule?," European Economic Review, Elsevier, vol. 46(4-5), pages 771-780, May.
    4. repec:ebl:ecbull:v:6:y:2005:i:2:p:1-15 is not listed on IDEAS
    5. Andrew Phiri, 2016. "Inflation persistence in African countries: Does inflation targeting matter?," Economics and Business Letters, Oviedo University Press, vol. 5(3), pages 65-71.
    6. Michael Bleaney & Manuela Francisco, 2005. "Inflation persistence and exchange rate regimes: evidence from developing countries," Economics Bulletin, AccessEcon, vol. 6(2), pages 1-15.
    7. Andrew Phiri, 2012. "Threshold effects and inflation persistence in South Africa," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 4(3), pages 247-269, July.
    8. Andrew Phiri, 2016. "Inflation persistence and monetary policy in South Africa: is the 3% to 6% inflation target too persistent?," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 8(2), pages 111-124.
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    Cited by:

    1. repec:vrs:subboe:v:64:y:2019:i:2:p:84-102:n:6 is not listed on IDEAS
    2. Andrew Phiri, 2016. "Inflation persistence in African countries: Does inflation targeting matter?," Economics and Business Letters, Oviedo University Press, vol. 5(3), pages 65-71.
    3. Phiri, Andrew, 2017. "Inflation persistence in BRICS countries: A quantile autoregressive (QAR) model," MPRA Paper 79956, University Library of Munich, Germany.
    4. Andrew Phiri, 2018. "Inflation persistence in BRICS countries: A quantile autoregressive (QAR) approach," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(1), pages 97-104, January.
    5. Mavikela Nomahlubi & Mhaka Simba & Phiri Andrew, 2019. "The Inflation-Growth Relationship in SSA Inflation-Targeting Countries," Studia Universitatis BabeČ™-Bolyai Oeconomica, Sciendo, vol. 64(2), pages 84-102, August.

    More about this item

    Keywords

    African countries; Developing countries; Inflation persistence; Inflation targeting; Panel data.;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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