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Growth Effect of Inflation in Central African Countries: Does Security Situation Matter?

Author

Listed:
  • Guivis Zeufack Nkemgha

    (Higher Teacher Training College, University of Bamenda)

  • Moses Abit Ofeh

    (Higher Teacher Training College, University of Bamenda)

  • Boker Poumie

    (University of Maroua)

Abstract

Despite the growing literature on the determinants of inflation on the one hand and the effect of inflation on economic growth on the other hand, little is known about the role of insecurity in these analyses, particularly in the Central African countries. This paper aims to contribute to the understanding of other neglected aspects of inflation by analyzing both its origins and its effects on the economy through the role of the security situation. The use of the system GMM on a panel of Central African countries during the period 2011–2017 reveals that, apart from traditional sources (money supply, economic growth, and oil rent), insecurity is also one of the origins of inflation. Moreover, inflation promotes economic growth while insecurity hinders it. Finally, the results also show that the coexistence of inflation and insecurity significantly constrains the production capacity of the economies of the sub-region. Thus, the resolution of the various present conflicts (internal and border) and the anticipation of possible future ones will make it probably to control the level of inflation as well as to eliminate this constraint which limits the production capacity of the economies of Central Africa.

Suggested Citation

  • Guivis Zeufack Nkemgha & Moses Abit Ofeh & Boker Poumie, 2023. "Growth Effect of Inflation in Central African Countries: Does Security Situation Matter?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(3), pages 3409-3430, September.
    • Handle: RePEc:spr:jknowl:v:14:y:2023:i:3:d:10.1007_s13132-022-01008-8
    DOI: 10.1007/s13132-022-01008-8
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    More about this item

    Keywords

    Inflation; Insecurity; Production capacity;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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