Investigating the Causal Relationship between Inflation and Trade Openness using Toda–Yamamoto Approach: Evidence from Zambia

Authors

  • Chibvalo Zombe Department of Economics, Copperbelt University, Kitwe, Zambia
  • Lincoln Daka Department of Economics, Copperbelt University, Kitwe, Zambia
  • Christopher Phiri Department of Economics, Copperbelt University, Kitwe, Zambia
  • Oliver Kaonga Department of Economics, University of Zambia, Lusaka, Zambia
  • Francis Chibwe Rural Electrification Authority, Lusaka, Zambia
  • Venkatesh Seshamani Department of Economics, University of Zambia, Lusaka, Zambia

Abstract

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.

Downloads

Download data is not yet available.

Downloads

Published

2017-11-07

Issue

Vol. 8 No. 6 (2017): November 2017

Section

Articles

License

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

How to Cite

Investigating the Causal Relationship between Inflation and Trade Openness using Toda–Yamamoto Approach: Evidence from Zambia. (2017). Mediterranean Journal of Social Sciences, 8(6), 171. https://www.richtmann.org/journal/index.php/mjss/article/view/10120