Investigating the Causal Relationship between Inflation and Trade Openness using Toda–Yamamoto Approach: Evidence from Zambia
The paper examines whether a significant relationship exists between inflation and trade openness in Zambia over the period 1985 to 2015. We use the Toda-Yamamoto approach to Granger causality to test for a causal relationship between inflation and trade openness. The results establish a bi-directional causality between inflation and trade openness. Further, there exists a positive relationship between inflation and trade openness in Zambia. Our findings stress the importance for central banks to understand the consequences of international trade for domestic inflation.
This work is licensed under Creative Commons Attribution 3.0 License
Mediterranean Journal of Social Sciences ISSN 2039-9340(Print) ISSN 2039-2117(Online)
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