Money, inflation and causality in a financially repressed economy: Algeria, 1970-88

The objective of the paper is to replicate tests identifying the line of causality between the money supply and the rate of inflation using Algerian date for the period 1970-88, and provide new evidence for a developing economy. The methodology adopted is that of Granger and the results show that th...

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Bibliographic Details
Published in:Applied economics 1993-04, Vol.25 (4), p.473-480
Main Authors: Beltas, Abdelkader, Jones, Trefor
Format: Article
Language:English
Subjects:
Analysis
Causality
Economic models
Economic theory
Inflation
LDCs
Money supply
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Summary:The objective of the paper is to replicate tests identifying the line of causality between the money supply and the rate of inflation using Algerian date for the period 1970-88, and provide new evidence for a developing economy. The methodology adopted is that of Granger and the results show that there is a very strong relationship between the money supply and the rate of inflation with the line of causation being unidirectional, that is, from the money supply to inflation with no feedback effects.
ISSN:0003-6846
1466-4283
DOI:10.1080/00036849300000055