Theoretically proposed policy instrument to address the negative effect of inflationary inflow into positive macroeconomic growth: The case study of the Sierra Leone economy

Tweneboah Senzu, Emmanuel (2021): Theoretically proposed policy instrument to address the negative effect of inflationary inflow into positive macroeconomic growth: The case study of the Sierra Leone economy. Published in: Eliva Publication: ISBN:978-1-63648-597-3 No. Book, Chapter (2), pp.27-47 (5 January 2022): pp. 1-28.

Abstract

The paper empirically examines the predictive factors of the inflationary rate observed to be the vector force, and a predominant shock of the macro-economy, with an extended impact on the rise and fall of the domestic currency value of the Sierra Leonean economy. The author thereby relied on a statistical tool of an Exogenous uni-variate auto-regression integrated moving average, to design a forecasting model that will probably estimate the future inflationary direction of the Sierra Leone economy, as well identify the degree of correlation effect of other independent forces of the market that has a significant impact on the domestic inflation. On that basis prescribe structural policy instrument, as a recommendation for a sustainable macroeconomic growth in a loose-out inflationary condition. The empirical study deduced that at an average price shift of (+/- 0.032) of the Leone currency with the US dollar at the open market exchange rate, thus causes a percentage point change of prices transmission to the endogenous economy, when all other factors remain constant.

• Item Type: MPRA Paper
• Language: English
• Keywords: Inflation, Exchange rate, policy instrument, regression models, monetary policy
• Subjects: E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E17 - Forecasting and Simulation: Models and Applications; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies

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