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Determinants of inflation in CEMAC: the role of money

Jacques Landry Bikai, Hardit Batoumen M. and Armand Fossouo

MPRA Paper from University Library of Munich, Germany

Abstract: The aim of this study is to investigate the causes of inflation in CEMAC, with a particular attention to the monetary dimension. Using a Panel Vector Autoregressive (PVAR) approach on CEMAC countries and data from 1990 to 2014, we show that money supply and imported inflation are the two main sources of inflation in CEMAC countries. These factors seem to explain inflation better than oil prices, budget balance and output gap. Specifically, the results show that money supply causes about 24% of inflation’s variation while imported inflation explains about 6% of inflation’s fluctuations. However, an important inflation’s inertia is observed (64% in mean), enlightening some structural problems, in particular, the slowness of expectations adjustment of agents in CEMAC.

Keywords: Panel VAR; Inflation; Monetary Policy; Central Bank Policy (search for similar items in EconPapers)
JEL-codes: C33 E30 E52 E58 (search for similar items in EconPapers)
Date: 2016-11-30
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:89111

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