Deficits, Debt Financing, Monetary Policy and Inflation in Developing Countries: Internal or External Factors?

Amir Kia ()
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Amir Kia: Department of Finance and Economics, Utah Valley University

No 04-15, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: This paper focuses on internal and external factors, which influence the inflation rate in developing countries. A monetary model of inflation rate, capable of incorporating both monetary and fiscal policies as well as other internal and external factors, was developed and tested on three developing countries: Egypt, Iran and Turkey. The model performed well on the data of these countries. It was found that government debt and deficits along with other factors are important determinants of inflation. Furthermore, most sources of inflation in these countries are domestic factors.

Keywords: Demand for money; inflation; fiscal and monetary policies; external and internal factors (search for similar items in EconPapers)
JEL-codes: E31 E41 E62 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2004-10-21
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Published: Carleton Economic Papers

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Persistent link: https://EconPapers.repec.org/RePEc:car:carecp:04-15

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