Modeling Inflation for Mali

Mame Astou Diouf

No 2007/295, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; price inflation; CFA franc; inflation model; U.S. dollar (search for similar items in EconPapers)
Pages: 34
Date: 2007-12-01
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Citations: View citations in EconPapers (19)

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