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Money Supply and Inflation Relationship in the Turkish Economy
Cahit Gungor,Ali Berk
Journal of Applied Sciences , 2006,
Abstract: The relationship degree between money supply and inflation is one of the important element in macroeconomic policy as governments try to control inflation. In this study, this relationship and its inflation forecasting potential is investigated for the Turkish Economy. The multilayer perceptron neural network model is constructed for the monthly data set from 1996:2 to 2006:1. Broad money supply plus foreign demand deposits (M2Y), seasonal dummy, time trend dummy and previous inflation (auto-regressive term) are used as input variables and inflation is used as output variable of the model. Sensitivity analysis is applied to discover the cause and effect relationship between input and output variables. Results show that the model predicts the level of the inflation with a reasonably good degree of accuracy.
Money Supply and Inflation in Malawi: An Econometric Investigation
Kisu Simwaka,Perks Ligoya,Grant Kabango,Mtendere Chikonda
The International Journal of Applied Economics and Finance , 2012,
Abstract: This study examined the relative importance of monetary factors in driving inflation in Malawi. A stylized inflation model is specified that includes standard monetary variables, the exchange rate and supply-side factors. The results indicated that inflation in Malawi is a result of both monetary and supply-side factors. Monetary supply growth drives inflation with lags of about 3 to 6 months. On the other hand, exchange rate adjustments play a relatively more significant role in fuelling cost-push inflation. It is further observed that slumps in production generate inflationary pressures. At policy level, the Reserve Bank should ensure that broad money supply expands in line with nominal gross domestic product. However, it must be emphasized that monetary policy alone might not address other exogenous structural shocks considered as additional causes of inflation. What monetary policy can do is to slowdown the rate of inflation expectations by ensuring that prices in other categories of non-food items slow down. For example, it has been shown that exchange rate shocks have a strong effect on inflation. Given this finding, exchange rate stability is key to anchoring inflation expectations, as the exchange rate pass-through in Malawi is relatively high. Finally, measures to control inflation must also emphasize enhancing production and supply, especially of food. Thus inflationary control should aim at policies which are directed at both monetary and supply factors.
An Investigation of Causal Relationship Between Fiscal Deficits, Economic Growth and Money Supply in Nigeria (1970-2009)  [cached]
Abu Maji,Ali S. Yusufu Bagaji,Moses Shaibu Etila,Jafa’aru Garba Sule
Canadian Social Science , 2012, DOI: 10.3968/j.css.1923669720120802.1005
Abstract: This study posits to investigate the relationship between fiscal deficits, economic growth and money supply in Nigeria. In Nigeria, huge fiscal deficits had been recorded over some years. What has been the nature of the relationship between fi scal defi cits, economic growth and money supply in Nigeria? To answer this question, Granger causality test was conducted to see whether fi scal defi cits granger cause economic growth and money supply or economic growth and money supply granger cause fiscal deficits. The results show that fiscal deficits granger causes economic growth and broad money supply in Nigeria. This implies that fiscal deficits positively affect economic growth and money supply in Nigeria. It is therefore recommended that fiscal deficits should be undertaken with efficient and well-executed plan for economic development. Furthermore, fi scal and monetary policies should be coordinated in such a way that both the public or private sector of the economy should not be handicapped due to shortage of finance and at the same time, infl ation is checked in the economy. Key words: Fiscal defi cits; Economic growth; Money supply; Public expenditure; Public revenue; Granger causality Résumé Cette étude est dans le but d’étudier la relation entre les défi cits budgétaires, la croissance économique et la masse monétaire au Nigéria. Au Nigeria, d’énormes déficits budgétaires ont été enregistrés en quelques années. Quelle a été la nature de la relation entre les défi cits budgétaires, la croissance économique et la masse monétaire au Nigéria? Pour répondre à cette question, le test de causalité de Granger a été mené afi n de voir si les défi cits budgétaires granger provoquer la croissance économique et l’offre de l’argent ou la croissance économique et l’offre de monnaie granger provoquer des déficits budgétaires. Les résultats montrent que l’exercice granger défi cits provoque la croissance économique et de l’offre monétaire au sens large du Nigeria. Cela implique que les défi cits budgétaires infl uer positivement sur la croissance économique et l’offre de monnaie au Nigeria. Il est donc recommandé que les déficits budgétaires devraient être entrepris au plan efficace et bien exécutée pour le développement économique. En outre, les politiques budgétaires et monétaires doivent être coordonnés de manière à ce que le secteur public ou privé de l’économie ne devrait pas être handicapé en raison d'un manque de finances et dans le même temps, l’inflation est vérifiée dans l’économie. Mots clés: Déficits budgétaires; La Croissance économique; La masse mon
The Structural Relationship between Chinese Money Supply and Inflation Based on VAR Model  [PDF]
Shichang Shen, Xiaoyi Dong
Applied Mathematics (AM) , 2019, DOI: 10.4236/am.2019.107041
Abstract: With the development of economy, more and more attention is paid to the relationship between money supply and inflation in the economic field. This paper chooses consumer price index (CPI) as an important index to measure the level of inflation, by choosing between January 2008 and March 2019 money in circulation M0, narrow measure M1, broad measure M2, consumer price index CPI monthly data as sample, building a vector autoregressive (VAR) model and using econometric methods of impulse response function and variance decomposition, and finally characterizes money in circulation M0, narrow measure M1, broad measure M2 and the relationship between consumer price index CPI and different sizes of the impact of inflation in the money supply relationship.
An Empirical Analysis of Fiscal Deficits and Inflation in Nigeria  [cached]
VINCENT N. EZEABASILI,JOSEPH N. MOJEKWU,WILSON E. HERBERT
International Business and Management , 2012, DOI: 10.3968/j.ibm.1923842820120401.0185
Abstract: The relationship between fiscal deficits and inflation has provoked considerable interest in the macroeconomics literature. While the theory postulates that fiscal deficits lead to inflation, empirical research has been less conclusive about the relationship. This paper reexamines the issue in the context of a developing country, Nigeria, using data over 1970–2006, a period of persistent inflationary trends. We adopted a modeling approach that incorporates cointegration techniques and structural analysis. The results reveal a positive but insignificant relationship between inflation and fiscal deficits in Nigeria. We did not also find any strong evidence linking past levels of fiscal deficits with inflation in Nigeria during the period. Rather, we report a positive long run relationship between money supply and inflation in the Nigerian economy, suggesting that money supply is procyclical and tends to grow at a faster rate than inflation rate. Key words: Fiscal deficit; Inflation; Cointegration; Money supply; Nigeria
Exchange Rate Depreciation and Inflation in Nigeria (1986–2008)  [PDF]
B Imimole
Business and Economics Journal , 2011,
Abstract: The research paper examined the impact of exchange rate depreciation on inflation in Nigeria for the period 1986–2008,using Auto Regressive Distributed Lag (ARDL) Cointegration Procedure. The research found that exchange ratedepreciation, money supply and real gross domestic product are the main determinants of inflation in Nigeria, and thatNaira depreciation is positive, and has significant long-run effect on inflation in Nigeria. This implies that exchange ratedepreciation can bring about an increase in inflation rate in Nigeria. The paper also found that inflationary rate in Nigeriahas a lagged cumulative effect. The research paper therefore concludes that although Naira depreciation is relevant inensuring an improvement in the production of exportable commodities, it must not be relied upon as a potent measure forcontrolling inflation in Nigeria. The paper therefore recommends the need for policy-makers to employ exchange ratedepreciation as a measure to compliment other macro-economic policies to stabilize the volatile inflationary rate inNigeria.
Coordinating a two-echelon supply chain under inflation and time value of money
B.C. Giri,S. Bardhan
International Journal of Industrial Engineering Computations , 2011,
Abstract: In the current global economic scenario, inflation plays a vital role in deciding optimal pricing of goods in any business entity. This paper develops a two-echelon (manufacturer-buyer) supply chain model taking into account inflation and time value of money. The present value of the total cost of the supply chain is derived when the manufacturer produces a number of lots, the sum of which is equal to the buyer’s total demand over a time horizon and the manufacturer’s each production lot is delivered to the buyer in n shipments. The optimal solution of the model is obtained for a numerical example after some adjustments (required to exhibit feasibility) in the derived solution. Sensitivity analysis is also carried out in order to examine the effects of changes in model-parameters on the optimal solution.
Analysis of Inflation and its Determinants in Nigeria
Odusanya Ibrahim Abidemi,Atanda Akinwande Abdul Maliq
Pakistan Journal of Social Sciences , 2012, DOI: 10.3923/pjssci.2010.97.100
Abstract: The study critically analyzed the dynamic and simultaneous inter-relationship between inflation and its determinants in Nigeria between 1970 and 2007. The time series variables properties were examined using the Augmented Dickey Fuller (ADF) unit root test and the result reveals that inflation rate, growth rate of real output and money supply and real share of Fiscal deficit are stationary at levels while other incorporated variables in the empirical analysis; real share of Import, Exchange rate and Interest rate are stationary at first difference. The long-run and short-run mechanism of interaction between inflation and its determinants were examined usig the Augmented Engle-Granger (AEG) cointegration test and Error Correction Mechanism (ECM) model, respectively.
Inflation, Money and Economic Growth in Cameroon  [cached]
Henri Ngoa Tabi,Henri Atangana Ondoa
International Journal of Financial Research , 2011, DOI: 10.5430/ijfr.v2n1p45
Abstract: For some decades now, anti-inflationary monetary policies have been adopted by the Central bank of the CEMAC zone in view of sustaining economic growth. Despite the low level of inflation recorded, the economic growth of Cameroon remains fragile. The objective of this article is to analyse the relationship between economic growth, inflation and money in circulation using a VAR model for the period 1960-2007. It is shown that increase in money supply increases growth and that growth causes inflation; however, an increase in money supply does not necessarily increase inflation.
A Simultaneous-Equation Model of Money Demand and Money Supply for Canada  [PDF]
Yu Hsing, Abul M. M. Jamal
Modern Economy (ME) , 2013, DOI: 10.4236/me.2013.41004
Abstract:

We estimate the money demand function and the money supply function for Canadasimultaneously by the three-stage least squares method. The inflation gap and the output gap are incorporated in the money supply function. Real money demand is positively affected by real GDP and negatively associated with the Treasury bill rate and the nominal effecttive exchange rate. Real money supply is positively influenced by the Treasury bill rate and negatively impacted by the inflation gap and the output gap.

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