The Impact of Fiscal Deficit on Inflation in Namibia

IF 1.7 Q3 BUSINESS, FINANCE

Journal of Central Banking Theory and Practice Pub Date : 2021-01-01 DOI:10.2478/jcbtp-2021-0007

J. Eita, V. Manuel, E. Naimhwaka, Florette Nakusera

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引用次数: 3

Abstract

Abstract This paper examined the impact of fiscal deficit on inflation in Namibia. The paper employed Autoregressive Distributed Lag Model (ARDL) and Granger causality approach using quarterly data for the period 2002 - 2017. Empirical results showed evidence of a long run positive effect of fiscal deficit on inflation in Namibia. This suggests that fiscal deficit has a direct effect on inflation in Namibia. The study also found a unidirectional causality running from fiscal deficit to inflation in Namibia. The study confirmed that South Africa’s prices have positive effect on inflation in Namibia. The key policy implication drawn for the result is that if not contained, high negative fiscal balances could impair the monetary policy objective of price stability. It is therefore advised that fiscal and monetary policies need to be well coordinated to bring fiscal deficit within acceptable level. Given that the main monetary policy goal in Namibia is to achieve and maintain price stability, the results in this study suggest that monitoring budget deficits and price developments in South Africa to develop informed policies is one way to achieve this objective.

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纳米比亚财政赤字对通货膨胀的影响

摘要本文研究了纳米比亚财政赤字对通货膨胀的影响。本文采用自回归分布滞后模型(ARDL)和格兰杰因果关系方法，使用2002 - 2017年的季度数据。实证结果表明，财政赤字对纳米比亚的通货膨胀有长期的积极影响。这表明，财政赤字对纳米比亚的通货膨胀有直接影响。该研究还发现，纳米比亚的财政赤字与通货膨胀之间存在单向因果关系。该研究证实，南非的价格对纳米比亚的通货膨胀有积极影响。该结果的关键政策含义是，如果不加以控制，高额的负财政平衡可能会损害价格稳定的货币政策目标。因此，财政政策和货币政策要协调一致，把财政赤字控制在可接受的水平。鉴于纳米比亚的主要货币政策目标是实现和维持价格稳定，本研究的结果表明，监测南非的预算赤字和价格发展以制定明智的政策是实现这一目标的一种方法。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Central Banking Theory and Practice BUSINESS, FINANCE-

CiteScore

2.80

自引率

57.10%

发文量

审稿时长

7 weeks

期刊介绍： Journal of Central Banking Theory and Practice is a scientific journal dedicated to publishing quality papers and disseminating original, relevant and applicable economic research. Scientific and professional papers that are published in the Journal of Central Banking Theory and Practice cover theoretical and practical aspects of central banking, monetary policy, including the supervision issues, as well as banking and management in central banks. The purpose of the journal is to educate the general public about the key issues that the central bankers globally face, as well as about contemporary research and achievements in the field of central banking theory and practice.