Determinants of price dynamics in Ethiopia

Solomon Mosisa Gofere

Ethiopian Journal of Economics, 2015, vol. 22, issue 2

Abstract: Since recent years inflation has become the most important macroeconomic problem in Ethiopia. This study examines the sources of this inflationary pressure using annual data spanning over 1971 - 2014. The study estimates a comprehensive price equation and performs some simulation analysis to uncover the sources of inflationary pressure. The result of the exercise indicates that monetary and fiscal fundamentals are important determinants of price dynamics in the short run. In the long run, output remains to be the most important variable. The result also indicates that the relationship between inflation and foreign prices is rather weak.

Keywords: Demand and Price Analysis; Public Economics (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eeaeje:259361

DOI: 10.22004/ag.econ.259361

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