A Dynamic Model of Inflation for Kenya, 1974–1996
IMF Working Papers, July 1, 1999
Source details
- Canonical URL
- A Dynamic Model of Inflation for Kenya, 1974–1996
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Bibliographic details
- Authors: Njuguna S. Ndung'u, Dick Durevall
- Published: July 1, 1999
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451852004.001
Authors and publication
- By Njuguna S. Ndung'u, Dick Durevall
- July 1, 1999
- IMF Working Papers, Working Paper No. 1999/097
- Issue: 097
- Volume: 1999
- Pages: 36
- DOI: https://doi.org/10.5089/9781451852004.001
- ISBN: 9781451852004
- ISSN: 1018-5941
Research scope and context
- Period analyzed: 1974–96
- Focus: dynamics of inflation in Kenya during a period characterized by external shocks and internal disequilibria
- Key subject areas: Exchange rates, Foreign exchange, Inflation, International trade, Monetary base, Money, Prices, Real exchange rates, Terms of trade
Model and methodology
- Developed a parsimonious and empirically constant error correction model (ECM)
- Employed cointegration techniques (keyword: Cointegration)
- Emphasized both long-run and short-run determinants of inflation
Main empirical findings
- Long-run effects on inflation:
- Exchange rate
- Foreign prices
- Terms of trade
- Short-run effects on inflation:
- Money supply
- Interest rate
- Food supply constraints influence the dynamics of inflation (keyword: Food supply)
- Inertia in inflation dynamics:
- Up to 1993, about 40 percent of current inflation was transmitted to the next quarter
- After 1993, inertia drops to about 10 percent
Keywords and technical terms used
- Cointegration
- Error Correction Model
- exchange rate
- Exchange rates
- Food supply
- Inertia
- Inflation
- inflation expectation
- inflation inertia
- Kenya
- maize-price inflation
- Monetary base
- Money demand
- rate of inflation
- Real exchange rate
- Real exchange rates
- Terms of Trade
- WP
IMF Working Paper: "A Dynamic Model of Inflation for Kenya, 1974–1996" by Njuguna S. Ndung'u and Dick Durevall, July 1, 1999.
Content in this bundle
- A Dynamic Model of Inflation for Kenya, 1974-1996 - WP/99/97