The inflation in Western African countries between 1970 - 1982

• Main Author: Wongbenjarat, Anan
• Format: Others
• Published: DigitalCommons@Robert W. Woodruff Library, Atlanta University Center 1985
• Subjects: Economics
• Online Access: http://digitalcommons.auctr.edu/dissertations/1216; http://digitalcommons.auctr.edu/cgi/viewcontent.cgi?article=2855&context=dissertations

For the last two decades, worldwide inflation had a very large impact on developing countries. While the rate of inflation slowed down in developed countries, increasing rate of inflation in Western African countries was almost doubled in the 1970s. The controversy over the increases in price level was between two groups of economists—structuralist and monetarist. The monetarist points out that inflation can not be substajned without a continued expansion of money supply. But the structuralist argues that in developing countries, the causes of inflation maybe factors other than money supply. Some of these factors are the stagnation of food supply, inelasticity and instability of the purchasing power of export or bottlenecks in the supply of social over head capital and skilled labor. The objective of this study is to empirically estimate the relative impacts of various identified sources of inflation in selected Western African countries. By using the ordinary least squares procedures, results show that the nonetarist variables are more significant in explaining the estimated inflation rate of West Africa than the struc— turaljst variables. In effect, we can conclude that the large quantity of money in people’s hands, without a corresponding quantity of goods to buy, led to the inflation. Structural variables may have a very important role, but the results of this study did not sufficiently bring out this role.