IMF AND WORLD BANK ECONOMIC PROGRAMS ON INFLATION: RELEVANCE TO NEPAD

We examine the relevance to the New Partnership of Africa’s Development (NEPAD) of IMF and the World Bank’s economic reform programs on inflation and the uncertainty of inflation in Ghana, Senegal and Uganda. The study period is from 1964-2009. GARCH (1, 1) framework is used to generate a time series of conditional variances of inflation as proxies for the uncertainty of inflation and use the granger causality procedure to establish the direction of the relationship between the two variables. We divide the years covered in this study into three segments, the pre-adjustment, adjustment and post-adjustment periods. The granger causality test results show in all three economies sensitivity of the direction of relationship between inflation and its uncertainty to IMF and World Bank inspired policies. Ghana shows significant evidence of the Friedman-Ball hypothesis in all regimes except the post-adjustment period and Senegal confirm the Cukierman-Meltzer proposition in the pre-adjustment and overall periods. In Uganda, results show bi-directional relationships dominating the links between the two variables. Also, evidence is presented indicating the reduction of both inflation and uncertainty of inflation in the countries during the adjustment period


Issue Date:
Jan 01 2013
Publication Type:
Journal Article
ISSN:
0973-1687
Language:
English
Published in:
Review of Applied Economics, Volume 9, Number 1-2
Page range:
61-81
JEL Codes:
E31; F33; F55; N17




 Record created 2017-10-31, last modified 2017-10-31

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