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Sources of Inflation in Sub-Saharan Africa
Author: Mr. Shanaka J Peiris and Régis Barnichon
Series:
IMF Working Papers
Volume/Issue:
Volume 2007: Issue 032
Language:
English
Publication Date:
01 Feb 2007
DOI:
https://doi.org/10.5089/9781451865967.001
ISBN:
9781451865967
ISSN:
1018-5941
Pages:
24
Keywords:
WP; money gap; excess demand; Inflation; Phillips curve; Money Demand; Panel Cointegration; Growth Accounting; panel money demand estimation; money demand function; Phillips Curve Panel GMM; inflation movement; output gap measure; Output gap; Demand for money; Potential output; Estimation techniques; Sub-Saharan Africa; integration estimation technique; Cointegration regression
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper explores the sources of inflation in Sub-Saharan Africa by examining the relationship between inflation, the output gap, and the real money gap. Using heterogeneous panel cointegration estimation techniques, we estimate cointegrating vectors for the production function and the real money demand function to recover the structural output and money gaps for seventeen African countries. The central finding is that both gaps contain significant information regarding the evolution of inflation, albeit with a larger role played by the money gap. There is no significant evidence of asymmetry in the relationship.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund