In this paper, we test the existence of an optimal inflation interval within which, the inflation of the West African countries supports economic growth. Beside this objective, we seek to test the validity of the 5% inflation threshold not to be exceeded, proposed as a convergence criterion for the fifteen countries of the region called to form a monetary union by 2020. Our analysis covers the period 2007-2016. By adopting a nonlinear approach, our investigation reveals two (02) endogenous inflation thresholds estimated at 8.01% and 15.46%. The positive effect on growth begins when inflation is comprised between the two thresholds. Above this interval, inflation has no effect on economic growth. Our results invalidate hence the 5% inflation threshold proposed as a convergence criterion and for supporting economic growth within the future monetary union. For a high-performing monetary union, preferably it would be better to define an inflation threshold between 8.01 and 15.46% as convergence criterion.

No abstract

This paper analyzes the relationship between the demand for tobacco, its price and the economic factors that may influence it. The objective is to understand the response of consumers to an increase in tobacco prices. The price increase is assumed to be caused by the effect of increasing tobacco taxes, which is a major tobacco control policy. This paper also analyzes the reaction of smokers to an increase in the prices of other goods in the economy. To achieve this objective, we estimate the elasticities of these factors through the tobacco demand models proposed in the literature. The price of tobacco, consumer income per capita, the price of goods such as food and health care, and the strengthening of anti-smoking laws are among the variables used to estimate the demand equations for tobacco. The results of the estimations indicate first that the demand for tobacco is highly elastic with respect to its price; the price elasticity is estimated at -1.368. Tobacco demand is also sensitive to consumer income and the strengthening of anti-smoking laws. In contrast, changes in the prices of other non-addictive goods in the economy, such as food, have no influence on the demand for tobacco products. This means that when the price of other products increases, smokers are likely to reduce the quantity of these products consumed in order to maintain their level of tobacco consumption.