CEU Electronic Theses and Dissertations, 2018
| Author | Bekena, Sisay Menji |
|---|---|
| Title | Inflation, Money Supply And Economic Growth In Sub Saharan Africa |
| Summary | This study analyzes the effect of inflation on economic growth, and granger causality between price, output and money supply, using unbalanced panel data on Sub Saharan African countries from 1990-2016. A fixed effects estimation using 5-year averaged data shows that inflation significantly and negatively affects economic growth. Similarly, government expenditure as a percentage of GDP has a significant negative effect. Investment as a percentage of GDP has a positive significant impact while share of trade in GDP and convergence (ratio of GDP of South Africa to other countries) have insignificant effect. Robustness checks using 3 year averaged and annual data estimation show similar results as the base estimation using 5-year averaged data. In addition, instrumental variable regression using lagged money supply growth as an instrument for inflation show a significant and negative impact of inflation on all models. The paper conducts a test for threshold effects and the effect is found to be insignificant implying inflation affects growth negatively at all levels. The study finds no granger causality between the logs of real GDP, consumer price index and money supply. |
| Supervisor | Gillman, Max |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2018/bekena_sisay.pdf |
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