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Modelling the relationship between budget deficits, money supply and inflation in Fiji

CollectionsPacific Economic Bulletin (1991-2010)
Title: Modelling the relationship between budget deficits, money supply and inflation in Fiji
Author(s): Narayan, Paresh Kumar
Narayan, Seema
Prasad, Arti Devi
Publisher: Crawford School of Public Policy, The Australian National University
Asia Pacific Press
Description: 
For Fiji, which has been suffering persistent deficits since independence, determining the relationships between inflation, budget deficits, money supply, output, and import prices is essential. We find that inflation, deficits and money supply are cointegrated when inflation is the endogenous variable, and the long-run elasticities confirm that money supply and deficits induce inflation. While there is a short-run, unidirectional causality running from money supply to inflation and a bi-directional causality between money supply and budget deficits, in the long run both money supply and deficits ?Granger-cause? inflation.
URI: http://hdl.handle.net/1885/157821
ISSN: 1834-9455 (online)
0817-8038 (print)

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