Abstract

This paper examined the impact of fiscal deficit on inflation in Namibia. The paper employed Autoregressive Distributed Lag Model (ARDL) and Granger causality approach using quarterly data for the period 2002 - 2017. Empirical results showed evidence of a long run positive effect of fiscal deficit on inflation in Namibia. This suggests that fiscal deficit has a direct effect on inflation in Namibia. The study also found a unidirectional causality running from fiscal deficit to inflation in Namibia. The study confirmed that South Africa’s prices have positive effect on inflation in Namibia. The key policy implication drawn for the result is that if not contained, high negative fiscal balances could impair the monetary policy objective of price stability. It is therefore advised that fiscal and monetary policies need to be well coordinated to bring fiscal deficit within acceptable level. Given that the main monetary policy goal in Namibia is to achieve and maintain price stability, the results in this study suggest that monitoring budget deficits and price developments in South Africa to develop informed policies is one way to achieve this objective.

中文翻译：

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财政赤字对纳米比亚通货膨胀的影响

摘要

本文研究了财政赤字对纳米比亚通货膨胀的影响。本文使用2002年至2017年的季度数据，采用了自回归分布式滞后模型（ARDL）和Granger因果关系方法。实证结果表明，财政赤字对纳米比亚的通货膨胀具有长期的积极影响。这表明财政赤字对纳米比亚的通货膨胀有直接影响。该研究还发现，纳米比亚从财政赤字到通货膨胀存在单向因果关系。该研究证实，南非的价格对纳米比亚的通货膨胀具有积极影响。结果得出的关键政策含义是，如果不加以控制，高额的负财政收支平衡可能会损害价格稳定的货币政策目标。因此，建议财政和货币政策必须得到很好的协调，以使财政赤字在可接受的水平之内。鉴于纳米比亚的主要货币政策目标是实现和维持价格稳定，因此本研究结果表明，监测南非的预算赤字和价格发展以制定知情政策是实现这一目标的一种方法。