University of Khartoum

Causality between money, income and prices in Sudan (1970-2003

Causality between money, income and prices in Sudan (1970-2003

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Title: Causality between money, income and prices in Sudan (1970-2003
Author: Abedlla Mahjoub, Abedlla
Abstract: This study aims to investigate the causal relationship between money and income and money and prices in Sudan using annual data ranging from 1970 to 2003 and employing Granger causality (1969) and error correction models. Using cointegration technique, the study shows that there is long-run relationship between money, income and prices in Sudan. The study further suggests a one way causation running from income to money. This implies that probably real factors rather than money supply has played a major role in stimulating sudan’s national income. Regarding the causal relationship between money and prices, the analysis reveals a uindirectional causality running from prices to money implying that money supply increased by inflation in Sudan. According to the foregoing reslults, the study suggests that the money supply in the sudan has no role in determining income and prices. Thus, the study recommends that the attention should be paid to the supply-oriented policies such as public sector reform policy and markets liberalization policy in order to enhance income growth and reduce inflation rate. Also, the study recommends that the monetary sector should be enlarged and developed further in order to stimulate development in the economy
Description: 69 Pages69 Pages
URI: http://khartoumspace.uofk.edu/handle/123456789/12850
Date: 2015-06-16


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