The Relationship between Money Supply and the Rate of Inflation: A Causality Approach to the Study of the Jamaican Economy, 1961-2006

20 Pages Posted: 29 Mar 2015

See all articles by Samuel P. Indalmanie

Samuel P. Indalmanie

Government of Jamaica - Statistical Institute of Jamaica (STATIN); University of Technology, Jamaica

Date Written: March 27, 2011

Abstract

The objective of this paper is to test the hypothesis that there is a causal link between the rate of inflation and the rate of growth of money supply. Using quarterly data series for Jamaica during the period 1961 to 2006, the results show that there is a feedback effect between inflation and narrow money. On the other hand, there is a unidirectional causation running from inflation to quasi- and broad-money.

Keywords: Causality, inflation, money supply

Suggested Citation

Indalmanie, Samuel P., The Relationship between Money Supply and the Rate of Inflation: A Causality Approach to the Study of the Jamaican Economy, 1961-2006 (March 27, 2011). Available at SSRN: https://ssrn.com/abstract=2586254 or http://dx.doi.org/10.2139/ssrn.2586254

Samuel P. Indalmanie (Contact Author)

Government of Jamaica - Statistical Institute of Jamaica (STATIN) ( email )

University of Technology, Jamaica ( email )

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