Short and Long-Run Determinants of Inflation in Saudi Arabia: A Cointegration Analysis

Alnefaee, Saad M.

doi:10.5430/ijfr.v9n4p35

Cited by 6 publications

(5 citation statements)

References 6 publications

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“…Time series indication from 1960-2016 using a vector error correction model considering various variables like money supply, government spending, and others indicates different results. For instance, the nominal exchange rate is indicated to be significant in the long run while trading partner inflation is also significant in the long run (Naseem, 2018) [14]. Money supply is significant in the short run while government spending on its capital is significant in the long run.…”

Section: Methodology -Data Collection -Analysismentioning

confidence: 99%

“…Reports indicate that economists worldwide successfully identified the causes of the significant inflationary impact in 2022, attributing it to a combination of overlapping influences. Regarding the limitations of the supply chain network, the pandemic had two distinct effects on the global supply chain, as discussed by Alnefaee (2018) [7]. The implementation of mobility restrictions and lockdowns in 2020 and 2021 during the early stage of the pandemic has significantly disrupted the global supply chain, resulting in temporary shortages of supplies.…”

Section: Literature Reviewmentioning

confidence: 99%

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Influence of Inflation on the Economic Growth of Saudi Arabia

Jazia,

Khabbouchi

2024

Saudi J. Bus. Manag. Stud.

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Primary factors considered that influence inflation movement can experience significant changes due to the COVID-19 pandemic. This research focuses on examining macroeconomic factors which influence the inflation rate in Saudi Arabia which is critical for development and adjusting a suitable policy response. Saudi Arabia’s changing inflation trends are also affected by its internal and external factors including domestic demands, net spending of Government, and liquidity along with exchange rate movements and imported inflation. This research paper focuses on providing insights regarding previous studies conducted on this topic by adopting different approaches. The approach utilized in this study reflects mainly non-oil revenues like value-added tax along with levies related to expatriates on inflation. ARDL (Autoregressive Distribution Lag Model) has been applied instead of the Vector Error Correction model considering its robustness for 40 quarter sample sized integrated in this study. From the results, it has been confirmed that the inflation Movement in Saudi Arabia is more inclined to external factors than domestic factors.

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Section: Methodology -Data Collection -Analysismentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Influence of Inflation on the Economic Growth of Saudi Arabia

Jazia,

Khabbouchi

2024

Saudi J. Bus. Manag. Stud.

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“…Increase in money supply will increase the money growth and at last it will increase the inflation rate in a particular country too. Alnefaee (2018) and Muktadir (2018) said that there is a positive relationship between money supply and inflation rate. Both claimed that this both variables have high correlation meaning that when money supply increase then the inflation rate also will increase.…”

Section: Money Supplymentioning

confidence: 99%

“…Meanwhile, Mohamed et al (2021) using ARDL model discovered that the Nigerian inflation would have a long-run equilibrium relationship with exchange rate during 2005: Q1 to 2019: Q4. In contrast,Alnefaee (2018) reveal that inflation was negatively determined by the exchange rate in the long run by employed Johansen and Julius cointegration tests on Saudi Arabia for the period of 1987-2017. This result is supported by Muktadir (2018).…”

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confidence: 99%

Long-Run Determinants of Inflation in Malaysia and Indonesia: Does Geopolitical risk matter?

Yahya,

Pamuncak

2023

JSE

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This study attempts to investigate the determinants of inflation in Malaysia and Indonesia in the long run. By using macroeconomic variables that theoretically matter to manage inflation such as money supply and exchange rate, this study also includes geopolitical risk index as proxy of uncertainty to be investigated further as another determinant that may cause the increasing of inflation rate in Malaysia and Indonesia. The data covers the period 2014:M11 to 2023:M8. Autoregressive distributed lag (ARDL) approach is employed to determine the long-run relationship. The main findings in this study demonstrate that the money supply and geopolitical risk are among the determinants of inflation in Malaysia in the long run. Meanwhile contrary to that, only money supply determines inflation in Indonesia. The finding indicates that money supply and geopolitical risk matter to inflation management. Hence, this study suggests that monetary authorities must take an active role towards money supply and geopolitical risk issue.

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“…A bilateral causality was observed between inflation and GDP, inflation and imports, inflation and interest rate, and between inflation and remittance. Alnefaee (2018) employed Johansen and Julius cointegration tests (Johansen & Juselius 1990) and found a cointegration among inflation, money supply, domestic demand, exchange rate, and oil prices in Saudi Arabia for the period of 1987-2017. Inflation was positively explained by money supply, domestic demand, and oil prices, but it was negatively determined by the exchange rate in the long-run.…”

Section: Literature Reviewmentioning

confidence: 99%

Credit Card Usage and Inflation: A Case Study of a Small Open Economy

2020

JEM

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This study examined the influence of credit card usage on inflation in a small open economy, Malaysia. The existing studies used money supply, and bank lending as the key monetary determinants of inflation in Malaysia. These two variables had also been re-examined separately for comparison purpose. Other macroeconomic variables were economic activity and imports. The paper employs The Autoregressive Distributed Lag (ARDL) approach using time series data with monthly observations over 1997-2017. The results of this study showed that the price level, the imports and economic activity were cointegrated. In the long-run, credit card usage was more elastic than bank lending. The economic activity remained the most elastic determinant of price level. In the short-run, bank credit growth, and money supply growth determine the inflation. Meanwhile, imports growth and economic growth did not influence the inflation. The past inflation rates were found to be informative to the current inflation. Hence, this study suggested that inflation in Malaysia was due to 'too much financing'. This study also provided policy implications.

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Short and Long-Run Determinants of Inflation in Saudi Arabia: A Cointegration Analysis

Cited by 6 publications

References 6 publications

Influence of Inflation on the Economic Growth of Saudi Arabia

Influence of Inflation on the Economic Growth of Saudi Arabia

Long-Run Determinants of Inflation in Malaysia and Indonesia: Does Geopolitical risk matter?

Credit Card Usage and Inflation: A Case Study of a Small Open Economy

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