The Monetarist Explanation of Inflation: The Experience of Six African Countries

Abstract

The monetarist model of inflation is tested with quarterly data over the period 1960‐1983 from six African countries: Egypt, Ghana, Morocco, Nigeria, Sudan and Tunisia. The role of foreign factors in the inflationary process is examined in the model, the lag length is determined, the issue of causality is addressed and structural stability is tested. The empirical results are, in general, consistent with the monetarist explanation of inflation.