EVALUATION OF THE ECONOMIC RELATIONSHIP BETWEEN INFLATION AND ITS DETERMINANTS IN RWANDA
DOI:
https://doi.org/10.46827/ejefr.v0i0.756Cuvinte cheie:
inflation, exchange rate, interest rate, money supply, RwandaRezumat
This study aimed to estimate the inflation determinants in the Rwandan economy from 1980 to 2018 periods, focusing more on the hypothesized drivers such as dollar exchange rate, interest rates, broad money supply and real national income (GDP). The study used quantitative analysis using an econometric model called Ordinary Least Squares (OLS). The findings of this study show that there is a long-run relationship between inflation and its hypothesized drivers mainly growth in GDP (positive), the Exchange rate (negative), Broad money supply growth (positive) and Interest rate (negative).
JEL: E31, D51, P24
Article visualizations:
Referințe
Abdul, Q. (2006). Money, inflation, and growth in Pakistan, The Pakistan Development Review, 45, 203-212. 2.
Ahmed. S. A., Neel. M. J., & Wang D. (2012). Does Mandatory Adoption of IFRS Improve Accounting Quality? Preliminary Evidence. Contemporary Accounting. Research 30(4) DOI 10.2139/ssrn.150
Apere, T. O. & Karimo, T. M. (2014). Monetary policy effectiveness, output growth and inflation in Nigeria. Journal of Economics, Finance, and Management, 3, 301-307. 3.
Ananias, G. M., and Valence, K. (2012). Modeling inflation in Rwanda, Economic Review, National Bank of Rwanda.
Bagus, Philipp & Howden, David & Gabriel, Amadeus. (2014). Causes and Consequences of Inflation. Business and Society Review. 119. 10.1111/basr.12043.
Bashir, F. (2011), Determinants of inflation in Pakistan: An econometric analysis using Johansen Co-integration approach, Australian Journal of Business and Management Research, 1(5): 71-82.
Bekhet, Hussain & Othman, Nor (2012). Assessing the impact of expansionary fiscal policy on the Malaysian economy: a co-integration analysis.
Ben S. Bernanke, 2006. The benefits of price stability, Speech 171, Board of Governors of the Federal Reserve System (U.S.).
Bertuch-Samuels, A. & Bartholomew, P. (2011). Rwanda: Financial system stability assessment, IMF Country Report, 244. 5.
Buiter, Willem H. (2008a). Can Central Banks go Broke? CEPR Policy Insight No. 24, 17 May.
Danjuma, I., Jbrin, S. M. & Success, E. B. (2012). An assessment of the effectiveness of monetary policy in combating inflation pressure on the Nigerian economy. Erudite Journal of Business Administration and Management, 1, 7-16. 6.
Enu, P. and Havi, E. D. K. (2014). Macroeconomic Determinants of Inflation in Ghana: A Cointegration Approach, International Journal of Academic Research in Business and Social Sciences, 4(7): 95-110.
Gichondo, M. A. & Kimenyi, V. (2012). Modeling inflation in Rwanda. BNR Economic Review, 5, 56-82.
Godson, A. (2013). The effects of monetary policy on inflation in Ghana. International Institute for Science, Technology, and Education, 3, 82-90 10.
IMF. (2015). World Economic Outlook Database, Washington, D.C.
Khan, A. A., Ahmed, M. Q. and Hyder, K. (2009). Determinants of Recent Inflation in Pakistan, MPRA Paper No. 16254.
Kigabo, R. T, Okello, J., & Mutuyimana, J. (2015). Financial development, monetary policy and economic growth in Rwanda. BNR Economic Review, 7, 79-99.
Kigabo, R. T., Munyankindi, P. & Amahoro A. (2008). Monetary transmission mechanism in Rwanda. BNR Economic Review, 2, 34-66.
Kigabo, R. T. (2008). Money and inflation in Rwanda, BNR Economic Review, 3,75-109.
National Bank of Rwanda (2018). Monetary developments: Current trends and short-term policy stance. Rwanda: BNR.
Olatunji, G. B., Omotesho, O. A., Ayinde, O. E. and Ayinde, K. (2010). Determinants of
Oppong, A. et al. (2015). Key Determinants of Inflation in Ghana. British Journal of Economics, Management & Trade, 8(3): 200-2014.
Raza, H., Ahmed, F., Hussain, A. and Lal, I. (2013). Determinant of Inflation in Pakistan: An Econometric Analysis, Using Johansen Co Integration Approach, European Journal of Business and Management, 5(30): 115-122.
Peter Bernholz P. (2003): Monetary Regimes and Inflation. Edward Elgar Publishing (March 27, 2006).
Faure, Alexander Pierre, (2014). Interest Rates 1: What Are Interest Rates? Accessed on 18 February 2020 on http://dx.doi.org/10.2139/ssrn.2542083.
Government of Rwanda, 2018. BTI 2018 Rwanda Country Report. Accessed on 18 Feb. 2020 https://www.bti-project.org/en/reports/country-reports/detail/itc/RWA/.
Gravelle, Jane & Hungerford, Thomas. (2012). Can a contractionary fiscal policy be expansionary?. Deficit Reduction and Fiscal Policy: Considerations and Options. 143-158.
Solar Rwanda 2021. https://www.expogr.com/rwanda/solarexpo/countryinfo.php
Kiley, Michael J. (2008), Estimating the common trend rate of inflation for consumer prices and consumer prices excluding food and energy prices.
Richard Lipsey & Murray Smith, 2010. "Multilateral Versus Regional Trading Arrangements: Substitutes Or Compliments?," Discussion Papers dp10-03, Department of Economics, Simon Fraser University.
Rutayisire, M. J. (2013). Threshold effects in the relationship between inflation and economic growth: Evidence from Rwanda, African Economic Research Consortium (AERC), 1-33.
Ruzima, Martin and Veerachamy P. (2015). A Study on Determinants of Inflation in Rwanda from 1970-2013.
Shammari, N. and Sabaey, M. (2012), Inflation Sources Across Developed and Developing Countries; Panel Approach, International Business & Economics Research Journal, 11(2): 185-194.
Steven M. Sheffrin; Robert L. Manwaring (2003). Litigation, School Finance Reform, And Aggregate Educational Spending
Talukder. A. F. (2018). Monetary policy 2018 and its impact on the economy. The Independent.
(cited). (cited) .(cited) .(cited) (cited) (Cited, gvnt of Rwanda, 2018), (cited/rephrased)(our results, no need to cite, paraphrased rather)Tobin, J. (2008). "Monetary Policy". In David R. Henderson (ed.). Concise Encyclopaedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty.
UN, (2019). World Population Prospects 2019. https://population.un.org/wpp/Publications/Files/WPP2019_DataBooklet.pdf
Willem, B. H. (2008). Lessons from the North Atlantic Financial Crisis, paper prepared for presentation at the conference "The Role of Money Markets. jointly organized by Columbia Business School and the Federal Reserve Bank of New York on May 29-30, 2008.
