IMF AND WORLD BANK ECONOMIC PROGRAMS ON INFLATION: RELEVANCE TO NEPAD

Hermann Sintim-Aboagye

Review of Applied Economics, 2013, vol. 09, issue 01-2

Abstract: We examine the relevance to the New Partnership of Africa’s Development (NEPAD) of IMF and the World Bank’s economic reform programs on inflation and the uncertainty of inflation in Ghana, Senegal and Uganda. The study period is from 1964-2009. GARCH (1, 1) framework is used to generate a time series of conditional variances of inflation as proxies for the uncertainty of inflation and use the granger causality procedure to establish the direction of the relationship between the two variables. We divide the years covered in this study into three segments, the pre-adjustment, adjustment and post-adjustment periods. The granger causality test results show in all three economies sensitivity of the direction of relationship between inflation and its uncertainty to IMF and World Bank inspired policies. Ghana shows significant evidence of the Friedman-Ball hypothesis in all regimes except the post-adjustment period and Senegal confirm the Cukierman-Meltzer proposition in the pre-adjustment and overall periods. In Uganda, results show bi-directional relationships dominating the links between the two variables. Also, evidence is presented indicating the reduction of both inflation and uncertainty of inflation in the countries during the adjustment period

Keywords: Financial Economics; International Relations/Trade (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ags:reapec:264587

DOI: 10.22004/ag.econ.264587

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