The effects of industrial production, inflow remittances, and FDI on the rate of Inflation in Liberia 2000-2020

Anthanasius G. Paul
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Anthanasius G. Paul: School of Post Graduate Studies, Anhui Polytechnic University (AHPU), Anhui, China.

International Journal of Science and Business, 2021, vol. 5, issue 9, 181-191

Abstract: The effects of industrial production, inflow remittance, and FDI on the rate of inflation is the title of the research. The case study is Liberia and the analysis was tested through the Johansen co-integration and the correction miscalculation/ error model (ECM) was instigated. And both tools were used to establish the long-run relationship between the research variables. The testing of various research parameters presumed that there exists a long-run interaction between inflow remittances, FDI, and Inflation but realized that industrial production and inflation have a negative response to each other (an increase in production decreases inflation and vice versa). The Liberian government can prioritize the improvement in industrial production in the manufacturing sector which will reduce the rate of inflation. Furthermore, FDI and inflow remittance can be monitor and encourage foreign investors to invest which will decrease unemployment and the inflow of new technologies in all sectors. When these suggestions are followed strategically, this could decrease the rate of inflation and help citizens improve their lives.

Keywords: Industrial production; FDI; Inflow remittances; Inflation Co-integration; and Error Correction Model (search for similar items in EconPapers)
Date: 2021
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