Uncertainty of the Inflation and Economic Growth: The Case of East African Countries

Journal of Social and Economic Statistic, July 2018

Posted: 2 Oct 2019

See all articles by Muhia John Gachunga

Muhia John Gachunga

Capital University of Economics and Business, International School of Economics and Management

Date Written: July 17, 2018

Abstract

Based on a VAR-GARCH model this paper proposes an assessment of the relationship between the uncertainty emanating from the volatility of inflation and the economic growth of the East African countries. The results suggested the continued persistence of volatility in inflation and economic growth but also a very significant magnitude of the uncertainty of inflation. The transmission mechanisms of uncertain inflation on economic growth was observed to differ across countries. Therefore, Macroeconomic convergence, price stabilization and development policies in the region have not been enough to counteract the persistence of fluctuations in inflation and economic growth, hence unable curb the overall negative effects of the interaction of inflation shocks across countries

Keywords: Inflation, Uncertainty of Inflation, Economic Fluctuation, Economic Growth

JEL Classification: E23, E29, E58 E62

Suggested Citation

Muhia, John Gachunga, Uncertainty of the Inflation and Economic Growth: The Case of East African Countries (July 17, 2018). Journal of Social and Economic Statistic, July 2018, Available at SSRN: https://ssrn.com/abstract=3455571

John Gachunga Muhia (Contact Author)

Capital University of Economics and Business, International School of Economics and Management ( email )

Beijing
China

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