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Analyzing Determinants of Inflation When There Are Data Limitation The Case of Sierra Leone

This paper examines the determinants of inflation in Sierra Leone using a structural vector autoregression (VAR) approach to help forecast inflation for operational purposes. Despite data limitations, the paper accurately models inflation in Sierra Leone. As economic theory predicts, domestic inflat...

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Bibliographic Details
Main Author: Kalonji, Kadima
Other Authors: Gottschalk, Jan, Miyajima, Ken
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2008
Series:IMF Working Papers
Subjects:
Prices
Price Level
Energy: Demand And Supply
Inflation
Monetary Economics
Monetary Base
Currency
Exchange Rates
Oil Prices
Foreign Exchange
Monetary Policy, Central Banking, And The Supply Of Money And Credit: General
Money Supply
Deflation
Money And Monetary Policy
Macroeconomics
Real Exchange Rates
Sierra Leone
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper examines the determinants of inflation in Sierra Leone using a structural vector autoregression (VAR) approach to help forecast inflation for operational purposes. Despite data limitations, the paper accurately models inflation in Sierra Leone. As economic theory predicts, domestic inflation is found to increase with higher oil prices, higher money supply, and nominal exchange rate depreciation. The paper then employs a historical decomposition approach to pinpoint the sources of a marked decline in inflation in 2006 and assesses its forecasting properties. Overall, the model serves as a useful addition to the toolkit for analyzing and forecasting inflation in countries with limited data availability
Physical Description:40 pages
ISBN:9781451871296

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