Download or read book An Estimation of Inflation Threshold for Africa written by Ikechukwu Kelikume and published by . This book was released on 2019 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective of this study was to shed new light on the non-linear effects of inflation and the inflation thresholds for long-term growth in Africa. Using a dynamic panel threshold model, the study covered a large panel-data set of 41 African countries for the period 1960-2015. The sample was divided into 21 resource rich countries and 20 non-resource rich countries in order to see if there are any differences in the empirical linkage between inflation and long-term growth. For the full sample of African countries, the empirical evidence showed that inflation hampered growth if it exceeds 11.1 percent. Below this threshold, however, the impact of inflation on growth remained positive though insignificant. However, the results differed for resource rich and non-resource rich African countries: inflation was beneficial for growth when inflation is below 12.5 percent and 9.4 percent threshold levels for resource rich and non-resource rich African countries, respectively. However, when inflation exceeded these threshold levels, it had a negative effect on growth. The estimated inflation threshold value for resource rich countries was definitely more than in non-resource rich countries. The evidence clearly suggested a growth-dampening effect of excessive inflation for Africa.

Download or read book Threshold effects of inflation on economic growth in selected African regional economic communities Evidence from a dynamic panel threshold modeling written by Arcade Ndoricimpa and published by Litres. This book was released on 2022-01-29 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective of this study is to estimate inflation threshold and examine its impact on the inflation-growth nexus in selected African regional economic communities. While a number of empirical studies exist in this area for developing countries, they bundle up countries from Asia, Africa and Latin America which do not have the same inflation experiences. This study therefore focuses on Africa. However, since African regional groupings themselves have different inflation experiences, non-linearity in the relationship between inflation and growth is explored within each grouping separately. The study uses dynamic panel threshold modeling recently suggested by Kremer et al. (2013) which extends the non-dynamic panel threshold model of Hansen (1999) and the cross-sectional threshold model of Caner and Hansen (2004). The results indicate that the estimated inflation threshold is different across the regional economic communities. Nonlinearity in inflation-growth nexus seems to hold in CEMAC, COMESA and SADC while it is questioned in WAEMU and WAMZ. For CEMAC, COMESA and SADC, the findings indicate that inflation above the threshold is harmful to growth. Some correlations are established in this study but further analysis is needed to suggest a policy.

Download or read book Inflation and Growth in the WAMZ Evidence from a Threshold Analysis written by Abu Bakarr Tarawalie and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The focus of this paper was to empirically estimate the threshold levels of inflation in the WAMZ, using the conditional least square technique. The study also identified the determinants of growth in the WAMZ. The empirical analysis uses annual data from 1970-2010 for Ghana, Nigeria and Sierra Leone, and 1980-2010 for the Gambia and Guinea. The results showed that there exists a statistically significant long-run negative relationship between inflation and economic growth for the WAMZ countries. Furthermore, the empirical results strongly suggest the existence of threshold level of inflation for the WAMZ countries, beyond which inflation exert a negative effect on growth. The results revealed an inflation rate of 9 percent as the optimal rate of inflation for the WAMZ countries. The results showed that WAMZ countries threshold inflation rates lie within the convergence criterion of maintaining an inflation rate not exceeding 10 percent. The results are useful for policy makers in providing some clue in setting an optimal inflation target. Policy makers should implement policies aimed at achieving the threshold inflation rate that is consistent with higher economic growth. Thus, it is desirable to keep inflation rate at least within the threshold level in member countries, as it may help maintain sustainable growth. A sustainable increase in growth can be achieved by directing monetary policy towards maintaining price stability.

Download or read book Inflation Dynamics in South Africa written by Eliphas Ndou and published by Springer. This book was released on 2017-02-21 with total page 546 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book offers a comprehensive empirical analysis of South African inflation dynamics, using a variety of techniques including counterfactual analysis. The authors elaborate the roles in inflation of thresholds, nonlinearities and asymmetries introduced by economic conditions such as the size of exchange rate changes and volatility, GDP growth, inflation, output gap, credit growth, sovereign spreads and fiscal policy, providing new policy evidence on the impact of these. Ndou and Gumata apply techniques to determine the prevalence of updating inflation expectations, and reconsider the propagation effects of a number of inflation risk factors. Asking to what extent the evidence points to a need to enforce price stability and the anchoring of inflation expectation, the book fills existing gaps in South African Policy, and maintains a clear argument that price stability is consistent with the 3 to 6 per cent inflation target range, and that threshold application should form an important aspect of policy analysis in periods of macroeconomic uncertainty. As such, the book serves as an excellent reference text for academic and policy discussions alike.

Download or read book Inflation Growth Nexus and Regional Integration in West Africa written by Makiliwè Barcola and published by . This book was released on 2019 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we test the existence of an optimal inflation interval within which, the inflation of the west African countries supports economic growth. Besides this objective, we seek to test the validity of the 5% inflation threshold not to be exceeded, proposed as a convergence criterion for the fifteen countries of the region called to form a monetary union by 2020. Our analysis covers the period 2007-2016. By adopting a nonlinear approach, our investigation reveals two (02) endogenous inflation thresholds estimated at 8.01% and 15.46%. The positive effect on growth begins when inflation is comprised between the two thresholds. Above this interval, inflation has no effect on economic growth. Our results invalidate hence the 5% inflation threshold proposed as a convergence criterion and for supporting economic growth within the future monetary union. For a high-performing monetary union, preferably it would be better to define an inflation threshold between 8.01 and 15.46% as convergence criterion.

Download or read book Threshold Effect of Inflation on Economic Growth in the West African Monetary Zone written by Olorunsola E. Olowofeso and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: While previous studies have explored the relationship between inflation and economic growth, the existing literature on threshold effect of inflation on economic growth in the West African Monetary Zone (WAMZ) predominantly assumes a linear association, neglecting the possibility of nonlinearity. This study aims to fill the gap in the empirical literature by exploiting the variation in inflation rates across countries and over time to identify endogenously the threshold inflation level that affects economic growth in WAMZ countries over the period 2001-2019. The paper applies a Panel Smooth Transition Regression (PSTR) model, considering the heterogeneity in inflation rates across countries and over time and nonlinearities in the inflation-growth nexus. Results reveal an inflation threshold of 10.3 per cent per annum for WAMZ countries, showing that achieving moderate inflation below this threshold will stimulate economic growth while high inflation above the threshold is detrimental to growth. The result provides strong empirical support for the policy stance of WAMZ countries regarding the convergence criterion to contain inflation to a single-digit level. This finding highlights the importance of adopting moderate inflation target below the identified threshold of 10.3 percent to foster sustainable economic growth. It underscores the need for central banks to adopt more proactive approach to monetary policy by closely monitoring inflation levels and taking appropriate actions to keep inflation within this desired range. Indeed, the evidence of such a nonlinear relationship implies that central banks should pay close attention to managing inflation expectations, through measures including clear and effective communication of monetary policy actions, which would help anchor inflation expectations to ensure a favourable inflation environment that supports economic growth and improve credibility of monetary policy in the region.

Download or read book Inflation Threshold Levels and Economic Growth in the Franc Zone Countries written by Dimitri Sanga and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Inflation Threshold and Nonlinearity written by Derwina Morar and published by . This book was released on 2011 with total page 246 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Inflation Thresholds and Relative Price Variability in the ECOWAS Region written by Eunice N. Egbuna and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: While the relationship between inflation and relative price variability (RPV) has been widely investigated in developed and emerging market economies because of its direct relevance to monetary policy implementation, research has neglected this linkage in most developing countries especially in the ECOWAS region. This paper examines whether RPV responds differently to different inflation regimes across the ECOWAS region, determining the inflation threshold that would minimize the distortionary impact of expected inflation on RPV in the region. Using the Panel Smooth Transition Regression (PSTR) model over the period 2008:M1 to 2019:M12, the paper finds that ECOWAS countries would achieve lower RPV in the moderate/intermediate inflation regime where the undesirable effect of expected inflation on RPV fades out. This regime ranges from an inflation rate of 7.1 percent to 8.3 percent per annum. The paper further establishes different inflation thresholds for the WAEMU and WAMZ countries, which reflects the differences in inflation tolerance levels between the Zones. It shows that inflation targets below the thresholds of 5.5 percent and 8.3 percent per annum, are desirable in the WAEMU and WAMZ, respectively. Along these lines, this paper concludes that ECOWAS countries should adopt a two-tier inflation compliance regime, until a common monetary policy framework is adopted across the region. The determination of appropriate inflation targets in line with these thresholds in both Zones would pave the way for the adoption of an inflation targeting (IT) regime to anchor inflation expectations and enhance credibility to monetary policy across the wider ECOWAS region.

Download or read book Inflation Targeting and Exchange Rate Management In Less Developed Countries written by Mr.Marco Airaudo and published by International Monetary Fund. This book was released on 2016-03-08 with total page 65 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze coordination of monetary and exchange rate policy in a two-sector model of a small open economy featuring imperfect substitution between domestic and foreign financial assets. Our central finding is that management of the exchange rate greatly enhances the efficacy of inflation targeting. In a flexible exchange rate system, inflation targeting incurs a high risk of indeterminacy where macroeconomic fluctuations can be driven by self-fulfilling expectations. Moreover, small inflation shocks may escalate into much larger increases in inflation ex post. Both problems disappear when the central bank leans heavily against the wind in a managed float.

Download or read book Is There a Debt threshold Effect on Output Growth written by Mr.Alexander Chudik and published by International Monetary Fund. This book was released on 2015-09-08 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the long-run impact of public debt expansion on economic growth and investigates whether the debt-growth relation varies with the level of indebtedness. Our contribution is both theoretical and empirical. On the theoretical side, we develop tests for threshold effects in the context of dynamic heterogeneous panel data models with cross-sectionally dependent errors and illustrate, by means of Monte Carlo experiments, that they perform well in small samples. On the empirical side, using data on a sample of 40 countries (grouped into advanced and developing) over the 1965- 2010 period, we find no evidence for a universally applicable threshold effect in the relationship between public debt and economic growth, once we account for the impact of global factors and their spillover effects. Regardless of the threshold, however, we find significant negative long-run effects of public debt build-up on output growth. Provided that public debt is on a downward trajectory, a country with a high level of debt can grow just as fast as its peers in the long run.

Download or read book Inflation and Growth written by Stephanie Kremer and published by . This book was released on 2010 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Growth in Sub Saharan Africa written by Mr.Dhaneshwar Ghura and published by International Monetary Fund. This book was released on 1995-12-01 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper investigates empirically the determinants of economic growth for a large sample of sub-Saharan African countries during 1981-92. The results indicate that (i) an increase in private investment has a relatively large positive impact on per capita growth; (ii) growth is stimulated by public policies that lower the budget deficit in relation to GDP (without reducing government investment), reduce the rate of inflation, maintain external competitiveness, promote structural reforms, encourage human capital development, and slow population growth; and (iii) convergence of per capita income occurs after controlling for human capital development and public policies.

Download or read book Inflation in Emerging and Developing Economies written by Jongrim Ha and published by World Bank Publications. This book was released on 2019-02-24 with total page 513 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is the first comprehensive study in the context of EMDEs that covers, in one consistent framework, the evolution and global and domestic drivers of inflation, the role of expectations, exchange rate pass-through and policy implications. In addition, the report analyzes inflation and monetary policy related challenges in LICs. The report documents three major findings: In First, EMDE disinflation over the past four decades was to a significant degree a result of favorable external developments, pointing to the risk of rising EMDE inflation if global inflation were to increase. In particular, the decline in EMDE inflation has been supported by broad-based global disinflation amid rapid international trade and financial integration and the disruption caused by the global financial crisis. While domestic factors continue to be the main drivers of short-term movements in EMDE inflation, the role of global factors has risen by one-half between the 1970s and the 2000s. On average, global shocks, especially oil price swings and global demand shocks have accounted for more than one-quarter of domestic inflation variatio--and more in countries with stronger global linkages and greater reliance on commodity imports. In LICs, global food and energy price shocks accounted for another 12 percent of core inflation variatio--half more than in advanced economies and one-fifth more than in non-LIC EMDEs. Second, inflation expectations continue to be less well-anchored in EMDEs than in advanced economies, although a move to inflation targeting and better fiscal frameworks has helped strengthen monetary policy credibility. Lower monetary policy credibility and exchange rate flexibility have also been associated with higher pass-through of exchange rate shocks into domestic inflation in the event of global shocks, which have accounted for half of EMDE exchange rate variation. Third, in part because of poorly anchored inflation expectations, the transmission of global commodity price shocks to domestic LIC inflation (combined with unintended consequences of other government policies) can have material implications for poverty: the global food price spikes in 2010-11 tipped roughly 8 million people into poverty.

Download or read book Cost Effectiveness in Health and Medicine written by Marthe R. Gold and published by Oxford University Press. This book was released on 1996-07-18 with total page 462 pages. Available in PDF, EPUB and Kindle. Book excerpt: Cost-effectiveness in health and medicine presents a consensus of experts on appropriate methods for standardizing the conduct of CEAs for use in policy arenas. Standardization is of particular importance for CEA, because it allows comparisons of the costs and health outcomes of alternative methods of improving health, such as public health programs and medical technologies. The book provides a detailed discussion of the theoretical background underlying areas of controversy, and uses theory to guide explicit recommendations for study conduct.

Download or read book Central Banking and Monetary Policy in the Asia Pacific written by Akhand Akhtar Hossain and published by Edward Elgar Publishing. This book was released on 2009-01-01 with total page 371 pages. Available in PDF, EPUB and Kindle. Book excerpt: The strength of this book is that it summarises a vast amount of the modern literature in monetary economics. . . the book provides detailed and clear descriptions of monetary models. . . This comprehensive volume is a useful compendium of the monetary economics literature of the second half of the 20th century, which has to a certain extent been over taken by events. Paul Wachtel, Asian-Pacific Economic Literature This well-researched and finely crafted book is a valuable addition to the literature on monetary policy in developing countries. It explains the concepts and tools of monetary policy in a simple manner and discusses how monetary policy works in developing Asia in a historical context within the framework of an outward-oriented development strategy. I am not aware of any other book that covers the organisational and institutional aspects of major central banks in developing Asia. Prema-chandra Athukorala, Australian National University This book elaborates the key concepts, principles and models of inflation and monetary policy and explains how they remain relevant and useful to the design and conduct of monetary policy in developing Asia. In this rapidly growing region, price stability remains important and therefore monetary policy has gained increasing importance. Even while emphasising the importance of the classical approach, the book discusses alternative frameworks and points out areas where a consensus is emerging. The review of the literature is extensive and careful. Along with developing this theme, the book reviews the structure and governance of most central banks in the Asia-Pacific and discusses how they conduct monetary policy to achieve price stability under different monetary policy frameworks. The book fills a gap in the central banking and monetary policy literature and has no close competitors. It should be useful to both students and policymakers in developing Asia. Salim Rashid, University of Illinois, US The 1997 East Asia crisis exposed many economic policy weaknesses in the Asia-Pacific region. In his latest book, Dr Hossain provides students with a refreshing up-to-date reference text on the concepts and principles of money, banking and finance in developing countries which differ in many ways to monetary institutions and practices in developed countries, which conventional monetary textbooks focus on. I thoroughly recommend it. A.P. Thirlwall, University of Kent, UK This timely book reviews the modern literature on inflation and monetary policy, and highlights contemporary issues in the design and conduct of monetary policy for price stability in developing Asia. Akhand Akhtar Hossain surveys the evolution of central banking and provides an introduction to the structure, function and governance of central banks in selected countries in the Asia-Pacific. The author also examines the major theories, models and approaches to inflation and monetary policy, and evaluates monetary policy regimes in selected countries in the Asia-Pacific in a historical context. This eloquent and comprehensible book will prove to be invaluable to undergraduate students on monetary theory and policy as well as banking and financial courses. Researchers exploring monetary policy concepts, principles and case studies will warmly welcome this book, as will policy-makers who have an interest in macroeconomics, monetary and financial policies.

Download or read book The Scope for Inflation Targeting in Developing Countries written by Mr.Paul R. Masson and published by International Monetary Fund. This book was released on 1997-10-01 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inflation targeting (IT) serves as monetary policy framework in several advanced economies, where it has enhanced policy transparency and accountability. The paper considers its wider applicability to developing countries. The prerequisites for a successful IT framework are identified as an ability to carry out an independent monetary policy (free of fiscal dominance or commitment to another nominal anchor, like the exchange rate) and a quantitative framework linking policy instruments to inflation. These prerequisites are largely absent among developing countries, though several of them could with some further institutional changes and an overriding commitment to low inflation make use of an IT framework.