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Fiscal Dominance and Inflation in the Democratic Republic of the Congo

This paper examines the fiscal dominance hypothesis in the Democratic Republic of the Congo (DRC) during 1981-2003, using multivariate cointegration analysis and vector errorcorrection modeling. Empirical results point to strong and statistically significant long-run relationships between budget def...

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Bibliographic Details
Main Author: Nachega, Jean-Claude
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2005
Series:IMF Working Papers
Subjects:
Inflation
Budget Systems
Public Finance & Taxation
Monetary Economics
Government Debt Management
Deflation
Debt Management
Monetary Policy, Central Banking, And The Supply Of Money And Credit: General
Debts, Public
Debt
Currency Issuance
Budget Planning And Preparation
Budgeting
Sovereign Debt
Money Supply
Price Level
Monetary Base
Banks And Banking
Budget
Prices
Macroeconomics
Banking
Central Banks And Their Policies
National Budget
Budgeting & Financial Management
Public Finance
Money And Monetary Policy
Congo, Democratic Republic Of The
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper examines the fiscal dominance hypothesis in the Democratic Republic of the Congo (DRC) during 1981-2003, using multivariate cointegration analysis and vector errorcorrection modeling. Empirical results point to strong and statistically significant long-run relationships between budget deficits and seigniorage, and between money creation and inflation. The long-run inflationary impact of budget deficits is robust to the inclusion of output growth or velocity in the inflation and monetary growth equations. The paper offers some policy recommendations for long-term price stability in the DRC.
Physical Description:44 pages
ISBN:9781451862409

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