What is it about?
Even though economic theory provides evidence on the external debt-inflation nexus, no study has attempted to assess whether Egypt's mounting external debt may be having a pass-through effect on Egypt's inflation.The present study uses an extended monthly time series of Egypt's wholesale price index (WPI) (rather than the conventional CPI) running from 2000 till 2020 M1 to address this deficiency and investigate the impact of Egypt's rising external debt on inflation, besides the other inflation determinants.
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Why is it important?
By employing ARDL cointegration analyses on monthly time series variables and using Egypt's wholesale price index to account for inflation, the paper concludes that external debt raises prices both in the short and long runs, besides other determinants. As external debt raises inflation and affects many other inflation-inducing factors indirectly, the paper concludes that reducing Egypt's external debt may help in curbing Egypt's inflation.
Perspectives
Inflation is an issue that touches every person in Egypt. I hope this paper sheds light on the reasons behind it especially with respect to the role of external debt in raising prices.
Prof. Heba Ezzeldin Helmy
October University for Modern Sciences and Arts
Read the Original
This page is a summary of: The external
debt‐inflation
nexus in Egypt, Journal of Public Affairs, December 2021, Wiley,
DOI: 10.1002/pa.2802.
You can read the full text:
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