Inflation expectations in Senegal: A source of amplifying effects on actual inflation?

Anticipations d'inflation: facteurs amplifiants de l'inflation observée?

Youssoupha Diagne ()
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Youssoupha Diagne: MEPC - Ministère de l'Economie, du Plan et de la Coopération

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Abstract: The recent inflation pushes experienced worldwide raised serious concerns about costs of living and the devastating impact on poverty and hunger. It is the pretext for this study that focuses on inflation expectations in the context of Senegal. The paper uses a state space approach to show that oil and food prices qualify as relevant determinants of inflation expectations. It also finds that inflation expectations are formed rationally but warns on the risks of price adjustments to account for the expectations in a context of large informality. Such behavior may lead to significant price distortions and further accentuate inflation.

Keywords: rational expectations; inflation; state space model (search for similar items in EconPapers)
Date: 2023-02-23
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