Budget deficits, money supply and price level in West Africa

Keho, Yaya

doi:10.18533/jefs.v4i05.209

Cited by 11 publications

(9 citation statements)

References 36 publications

(37 reference statements)

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“…Hence, there is evidence for Ethiopia that, increase indeficits would give rise to inflation through its impulse on money supply. This finding gives empirical support to (Shahin, 1992) and consistent with (Minyahilet al, 2016;Keho, 2016;Yemane, 2008;Tsegay & Rao, 2013;Sajid, 2000;Kflindo;1997;Shibeshi, 1994;Loening et al, 2009).…”

Section: Long-run Response Of Money Supply To Changes In Budget Deficitssupporting

confidence: 78%

Are Fiscal Deficits Really Inflationary? An Investigation Into Ethiopia’s Experience

Alemu

2020

HOLISTICA – Journal of Business and Public Administration

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This study establishes long-run relations between budget deficits and inflation, while controlling for money supply owing to the justified links between deficits and money supply especially for developing countries. We employed time series data with temporal coverage of 1980-2018. Augmented Dickey Fuller has tested nonstationary for all series, but with all stationary at first difference. The Engle-Granger (1981) methodology for Cointegration tested long-run relation between budget deficits, money supply and inflation. Due to Laney and Willet (1983), the conventional least squares regression was adopted to estimate parameters of long-run equation. The results evidenced that fiscal deficits and money supply have been at the root of galloping inflation in Ethiopia. Besides, budget deficits have been the root cause of money supply growth in Ethiopia; while giving empirical support to the hypothesis that, governments of least developed countries resort to monetize large portion of their deficits. There is a need to reform the fiscal aspect of the government, if the mounting rate of deficits has to be lessened. Budgetary imbalances can be rectified through enhancement of domestic capital market and setting limits on central bank borrowing. Besides, it could be vital to expand the tax base as well as intensify efficiency of the existing tax system in the country.

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Section: Long-run Response Of Money Supply To Changes In Budget Deficitssupporting

confidence: 78%

Are Fiscal Deficits Really Inflationary? An Investigation Into Ethiopia’s Experience

Alemu

2020

HOLISTICA – Journal of Business and Public Administration

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“…It is also interesting that another paper published a few years later (Jalil, et al 2014, see Table 1) asserts that a strong long-run relationship exists in Pakistan!A similar result is obtained by Abubakar et al,2014) in the case of Nigeria. Again, Keho (2016) concluded that budget deficits are not inflationary in the West African Economic and Monetary Union (WAEMU) countries.…”

Section: Resultsmentioning

confidence: 99%

The Impact of Budget Deficits on Inflation in Zambia

Bulawayo¹,

Chibwe²,

Seshamani³

2018

JEDS

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Despite the vast amount of research and received literature on the impact of budget deficits on inflation, the last word has not been spoken on the theme. Is there a significant causal relationship between budget deficits and inflation? In many developing countries especially in sub-Saharan African countries this question has not been adequately investigated through rigorous research. And yet, in many of these countries where inflation has often proved to be an intractable issue, it is important for policy makers to know how risky it would be to finance public programmes through deficit spending beyond certain limits. This paper examines the role of budget deficits as a contributor to inflation in Zambia where hardly any previous work has been done in recent years in addressing this question. An econometric analysis has been done using the AutoRegressive Distributed Lag (ARDL) approach. The analysis shows that while there are significant short-run impacts of deficits on inflation, no significant long-run relationship exists.

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“…(2014), Alavirad (2003), Alavirad ve Athawale (2005), Bayrak ve Kanca (2013), Catao ve Terrones (2005), Darrat (2000), Doğru (2014), Doğru ve Şentürk (2013), Günaydın (2004), İpek ve Akar (2016), Jalil vd. (2014), Keho (2016), Metin (1998), Myovella ve Kisama (2018), Nathan Pelesai ve ThankGod (2013), Narayan vd. (2006), Ngyuen (2015), Öruç (2016), Solomon ve De Wet (2004), Turan Koyuncu (2014).…”

Section: Sonuçmentioning

confidence: 99%

Türk ekonomisinde bütçe açığı ve enflasyon ilişkisinin sınır testi yaklaşımı ile eş-bütünleşme analizi

Maraş

Dumrul

2019

Erciyes Üniversitesi İktisadi Ve İdari Bilimler Fakültesi Dergisi

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In this study, the long-term relationship between budget deficits and inflation in the Turkish economy is analyzed by monthly data covering the period 2006:01-2018:10. Econometric methods used in the study; Expanded Dickey Fuller, Phillips-Perron an Ng-Perron unit root tests and a bonds testing approach. The main findings of the study; in the long term inflation between dolar exchange rate and M3 money supply statistically significant positive direction; a negative direction with the budget balance is to deternine relationship. In other words, although an increase in budget deficits, inflation has been on an upward trend; may tend to decrease with an increase in the budget surplus.

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Budget deficits, money supply and price level in West Africa

Cited by 11 publications

References 36 publications

Are Fiscal Deficits Really Inflationary? An Investigation Into Ethiopia’s Experience

Are Fiscal Deficits Really Inflationary? An Investigation Into Ethiopia’s Experience

The Impact of Budget Deficits on Inflation in Zambia

Türk ekonomisinde bütçe açığı ve enflasyon ilişkisinin sınır testi yaklaşımı ile eş-bütünleşme analizi

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