Inflation and economic growth in Cote d'Ivoire

Abstract

This paper investigates the relationships between inflation and economic growth in Cote d’Ivoire and makes some policy recommendations. The study uses annual data on economic growth and inflation over the period 1985 to 2010 and tests for the long-run and short-run relationships between inflation and economic growth by means of the ARDL bounds testing procedure. The findings are twofold. First , inflation imparts a positive and significant economic growth in the long-run. Second , in the short-run, inflation has a negative but insignificant effect on economic growth. Finally , to gain advantage from inflation, policy makers should target inflation at a level which is conducive to economic growth and promote economic growth through factors such as employment.