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Non-monetary Determinants of Inflation Volatility: Evidence from Nigeria

Non-monetary Determinants of Inflation Volatility: Evidence from Nigeria There is a large literature on the impact of exchange rate and monetary policy regimes on inflation volatility in emerging markets. Other determinants of inflation volatility are less well understood. Using monthly time-series data on the prices of ninety-six individual products in thirty-seven Nigerian states, I explore the non-monetary state-specific characteristics that drive local inflation volatility. Among the significant determinants of volatility are average inflation, transport and communication infrastructure, consumer access to credit markets and urbanisation. However, there is substantial heterogeneity across products in the relative importance of these factors. We discuss the implications of our results for development policy. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of African Economies Oxford University Press

Non-monetary Determinants of Inflation Volatility: Evidence from Nigeria

Journal of African Economies , Volume 19 (1) – Jan 18, 2010

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References (30)

Publisher
Oxford University Press
Copyright
© Published by Oxford University Press.
Subject
Articles
ISSN
0963-8024
eISSN
1464-3723
DOI
10.1093/jae/ejp015
Publisher site
See Article on Publisher Site

Abstract

There is a large literature on the impact of exchange rate and monetary policy regimes on inflation volatility in emerging markets. Other determinants of inflation volatility are less well understood. Using monthly time-series data on the prices of ninety-six individual products in thirty-seven Nigerian states, I explore the non-monetary state-specific characteristics that drive local inflation volatility. Among the significant determinants of volatility are average inflation, transport and communication infrastructure, consumer access to credit markets and urbanisation. However, there is substantial heterogeneity across products in the relative importance of these factors. We discuss the implications of our results for development policy.

Journal

Journal of African EconomiesOxford University Press

Published: Jan 18, 2010

Keywords: JEL classification E31 O11

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