Inflation and Economic Growth: Evidence from the Southern African Development Countries

Working paper 405
Author(s): 
Manoel Bittencourt, Renee van Eyden and Monaheng Seleteng
Publication date: 
January, 2014
Classification-JEL: 

In this paper we investigate the role of inflation rates in determining economic growth in fifteen sub-Saharan African countries, which are all members of the Southern African Development Community (SADC), between 1980 and 2009. The results, based on panel time-series data and analysis, suggest that in‡ation has had a detrimental effect to growth in the region. All in all, we highlight not only the fact that inflation has offset the prospective Mundell-Tobin effect and consequently reduced, the much needed, economic activity in the region,
but also the importance of an institutional framework conducive to a stable macroeconomic environment as a precondition for development and prosperity in the community.

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