Download PDFOpen PDF in browserThe Effects of Fiscal and Monetary Policy on Inflation in LebanonEasyChair Preprint 3205, version 224 pages•Date: April 26, 2020AbstractThe main objective of this research is to study the effects of fiscal and monetary policy on inflation and examine the effectiveness of Lebanese monetary and fiscal policy to control inflation between 1978-2019 using an autoregressive distributed lag (ARDL) cointegration technique (ARDL) developed by Pesaran et al. (2001) as well as Granger no-causality approach developed by Toda and Yamamoto (1995) in a two-variable vector autoregression model to explore the direction of causation among the variables of our model. Based on the empirical study, we found that:
Our research highlights the importance of the velocity of money in the process of inflation and warns against the risks of giving this variable a secondary role (assumed constant according to the quantitative theory of money) as in most macroeconomic models. Keyphrases: Inflation, fiscal policy, monetary policy, money supply, velocity of money
|