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Deficits, inflation and central banks' independence: evidence from developing nations

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  • K. H. Brown
  • M. Yousefi

Abstract

Deficits should Granger-cause inflation in developing countries since the central banks are not autonomous. Nevertheless, our empirical results refute the causality between government deficits and inflation in a study of ten developing countries.

Suggested Citation

  • K. H. Brown & M. Yousefi, 1996. "Deficits, inflation and central banks' independence: evidence from developing nations," Applied Economics Letters, Taylor & Francis Journals, vol. 3(8), pages 505-509.
    • Handle: RePEc:taf:apeclt:v:3:y:1996:i:8:p:505-509
    DOI: 10.1080/135048596356122
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    References listed on IDEAS

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    1. Hamburger, Michael J. & Zwick, Burton, 1981. "Deficits, money and inflation," Journal of Monetary Economics, Elsevier, vol. 7(1), pages 141-150.
    2. Ali F. Darrat, 1985. "Inflation and Federal Budget Deficits: some Empirical Results," Public Finance Review, , vol. 13(2), pages 206-215, April.
    3. Niskanen, William A., 1978. "Deficits, government spending, and inflation : What is the evidence?," Journal of Monetary Economics, Elsevier, vol. 4(3), pages 591-602, August.
    4. Canarella, Giorgio & Pollard, Stephen K., 1989. "Unanticipated monetary growth, output, and the price level in Latin America: An empirical investigation," Journal of Development Economics, Elsevier, vol. 30(2), pages 345-358, April.
    5. Alesina, Alberto & Summers, Lawrence H, 1993. "Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 151-162, May.
    6. Cukierman, Alex & Webb, Steven B & Neyapti, Bilin, 1992. "Measuring the Independence of Central Banks and Its Effect on Policy Outcomes," The World Bank Economic Review, World Bank, vol. 6(3), pages 353-398, September.
    7. McMillin, W. Douglas & Beard, Thomas R., 1982. "Deficits, money and inflation : Comment," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 273-277.
    8. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
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    Cited by:

    1. Ghulam Rasool Madni, 2014. "Taxation, Fiscal Deficit and Inflation in Pakistan," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 17(53), pages 41-60, September.
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    3. Yaya Keho, 2016. "Budget deficits, money supply and price level in West Africa," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 4(5), pages 1-8, October.
    4. Tadadjeu Wemba, Dessy-Karl & Essiane, Patrick-Nelson Daniel, 2018. "Autonomie des Banques Centrales et Finances Publiques en Afrique subsaharienne [Autonomy of Central Banks and Public Finances in Sub-saharan Africa]," MPRA Paper 100828, University Library of Munich, Germany.

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