This paper examines the growth-inflation nexus in Franc zone currency unions. It aims at estimating the inflation threshold above which additional inflationary pressures adversely affect economic expansion. It uses cointegration methods that are applied to data from 14 African countries from the Franc zone over 1970-2018. Based on country-level data, the results indicate that it is possible to increase the threshold levels used by regional central banks to 5.4-5.6 percent in the Central African Monetary Union and 4.3-4.5 percent in the West African Monetary Union. Homogeneous cointegration panel data analyses confirm the need to increase the threshold in Central African Monetary Union countries but do not in the West African Monetary Union countries.
Details
-
Author
Sanga,Dimitri, Gui-Diby,Steve Loris
-
Document Date
2020/09/21
-
Document Type
Policy Research Working Paper
-
Report Number
WPS9405
-
Volume No
1
-
Total Volume(s)
1
-
Country
-
Region
-
Disclosure Date
2020/09/21
-
Disclosure Status
Disclosed
-
Doc Name
Inflation Threshold Levels and Economic Growth in the Franc Zone Countries
-
Keywords
inflation; trade and investment; long-run relationship; percent inflation rate; fixed exchange rate regime; discrete high inflation crisis; marginal product of capital; negative impact on growth; low levels of inflation; level analysis; access to international market; state bank of pakistan; free movement of labor; average rate of inflation; natural resource rent; terms of trade; international trade openness; impact of inflation; panel data analysis
See More
Downloads
COMPLETE REPORT
Official version of document (may contain signatures, etc)
- Official PDF
- TXT*
- Total Downloads** :
- Download Stats
-
*The text version is uncorrected OCR text and is included solely to benefit users with slow connectivity.
Citation
Sanga,Dimitri Gui-Diby,Steve Loris
Inflation Threshold Levels and Economic Growth in the Franc Zone Countries (English). Policy Research working paper,no. WPS 9405 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/956741600700107596/Inflation-Threshold-Levels-and-Economic-Growth-in-the-Franc-Zone-Countries