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Title: |
Domestic and
International Sources of
Inflation in Developing Countries: Some Evidence from the Monetary
Approach |
| Author: |
Darrat, Ali F.;
Arize, Augustine C. |
| Author
Affiliation: |
LA Technical U;
E TX State U |
| Source: |
International Economic Journal, Winter 1990, v. 4, no. 4, pp. 55-69 |
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Publication Date: |
Winter 1990 |
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Abstract: |
Using the monetary approach, this paper
examines empirically the causes of inflation in twenty-five developing
countries. In addition to memory supply, the underlying money demand
function and foreign exchange rates are taken into account in the
inflationary process. The lag structures are determined by Akaike's FPE
criterion and the exogeneity assumptions are assessed by Granger-type
causality tests. The results suggest that the monetary approach provides
adequate explanations of inflation across all countries examined.
Besides changes in expected inflation and foreign exchange rates,
movements in base money in these countries have significantly
contributed to their inflationary pressures. |
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