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Inflation and Monetary Pass-Through in Guinea

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  • Mr. Rodolphe Blavy

Abstract

The paper analyzes the dynamics of inflation in Guinea during 1992-2003 applying cointegration and error-correction modeling to a bivariate model that includes consumer price and monetary variables. The empirical results, based on quarterly data, confirm the existence of a long-run relationship between money supply and consumer prices. This paper argues further that the pass-through has increased in recent years. Short-term dynamics are shown to accentuate the long-run impact. Impulse response analysis shows that a shock in the money stock will have an increasing impact over two years and will then stabilize at a higher level.

Suggested Citation

  • Mr. Rodolphe Blavy, 2004. "Inflation and Monetary Pass-Through in Guinea," IMF Working Papers 2004/223, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2004/223
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    References listed on IDEAS

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    1. Mr. Jean-Claude Nachega, 2001. "A Cointegration Analysis of Broad Money Demand in Cameroon," IMF Working Papers 2001/026, International Monetary Fund.
    2. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    3. International Monetary Fund, 2002. "Kenya: Selected Issues and Statistical Appendix," IMF Staff Country Reports 2002/084, International Monetary Fund.
    4. Stephen G. Cecchetti, 1997. "Measuring short-run inflation for central bankers," Review, Federal Reserve Bank of St. Louis, issue May, pages 143-155.
    5. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    6. Louis Kuijs, 1998. "Determinants of Inflation, Exchange Rate, and Output in Nigeria," IMF Working Papers 1998/160, International Monetary Fund.
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    Cited by:

    1. Nair Sultana & Rabiunnesa Koli & Mahamuda Firoj, 2019. "Causal Relationship of Money Supply and Inflation: A Study of Bangladesh," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(1), pages 42-51, January.
    2. Loening, Josef L. & Durevall, Dick & Ayalew Birru, Yohannes, 2009. "Inflation Dynamics and Food Prices in an Agricultural Economy: The Case of Ethiopia," Working Papers in Economics 347, University of Gothenburg, Department of Economics.
    3. Sanogo, Issa & Gyengani, Zakaria, 2008. "Private investment in guinea, does macro-instability matter? A comparative analysis," MPRA Paper 11606, University Library of Munich, Germany.
    4. Durevall, Dick & Loening, Josef L. & Ayalew Birru, Yohannes, 2013. "Inflation dynamics and food prices in Ethiopia," Journal of Development Economics, Elsevier, vol. 104(C), pages 89-106.
    5. Bruno Ferreira Frascaroli & Jailson da Conceição Teixeira de Oliveira, 2017. "Sub-Saharan African Countries’ Dependence on the External Inflation: Empirical Evidence Using Copulas," International Business Research, Canadian Center of Science and Education, vol. 10(12), pages 1-21, December.
    6. Koffie Ben Nassar, 2005. "Money Demand and Inflation in Madagascar," IMF Working Papers 2005/236, International Monetary Fund.
    7. Mr. Tidiane Kinda, 2011. "Modeling Inflation in Chad," IMF Working Papers 2011/057, International Monetary Fund.
    8. Tidiane Kinda, 2013. "Oil windfall, public spending and price stability: modelling inflation in Chad†," Applied Economics, Taylor & Francis Journals, vol. 45(21), pages 3122-3135, July.
    9. Mr. Francis Y Kumah, 2006. "The Role of Seasonality and Monetary Policy in Inflation Forecasting," IMF Working Papers 2006/175, International Monetary Fund.
    10. Dick Durevall & Bo Sjö, 2012. "Working Paper 151 - The Dynamics of Inflation in Ethiopia and Kenya," Working Paper Series 400, African Development Bank.
    11. Mr. Kenji Moriyama, 2008. "Investigating Inflation Dynamics in Sudan," IMF Working Papers 2008/189, International Monetary Fund.

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