Determinants of Inflation in Africa: A Systematic Review
International Journal of Management and Fuzzy Systems
Volume 6, Issue 4, December 2020, Pages: 59-63
Received: Sep. 4, 2020;
Accepted: Sep. 25, 2020;
Published: Dec. 31, 2020
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Wondimu Ereda Melaku, Department of Economics, Mekdela Amba University, Mekane Selam, Ethiopia
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Inflation refers to increase in general level of price of a basket of goods and services that is representative of an economy over a period of time. When there is a general rise in price level the entire economy will be affected. Rising price known as inflation impact the cost of living, the cost of doing business, borrowing money and every other facet of the economy. Several factors are responsible for rise in price level in a given country/nation. The main aim of this study is to assess the determinants of inflation in Africa based on empirical studies conducted in the past and give insights for other researchers. For this purpose, concentrated and careful literature review was done on 13 papers conducted in 13 African countries. Seven variables were considered for analysis such as broad money supply, GDP, price of imported goods and services, exchange rate, interest rate, price expectation and population growth. The result shows that output/national income, broad money supply, price of imported goods and services and exchange rate are the critical variables affecting the performance of inflation. The others variables: interest rate, price expectation and population growth are also slightly important in explaining inflation. In the literature selected for review it is observed that almost all are used macro variables without considering other factors such as political, social institutional and others. The study finally recommends that countries should seriously work in creating moderate inflation to grow their economy by increasing their national income in addition to stable fiscal and monetary policy and also focusing on the aforementioned factors is crucial. I declare that this is my own work and it is original.
Inflation, Determinant, Long Run
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Wondimu Ereda Melaku,
Determinants of Inflation in Africa: A Systematic Review, International Journal of Management and Fuzzy Systems.
Vol. 6, No. 4,
2020, pp. 59-63.
Copyright © 2020 Authors retain the copyright of this article.
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