MACROECONOMIC DETERMINANTS OF INFLATION IN MIDDLE EAST AND NORTH AFRICAN COUNTRIES

Abstract

The purpose of this research is to measure the effect of leading macroeconomic variables of the Middle East and North African (MENA) countries, as well as the nature of the relationship between the factors and inflation. Hence, studying the factors that affect Inflation is notably vital in the process of setting policies in order to regulate inflation rates to protect economies. This research will display the kind of nature in the relationship between the growth of the six macroeconomic factors (broad money, current account balance, annual gross domestic product, gross national expenditure, imports of goods and services, and real interest rate) and the consumer price index growth in some of the Middle East and North African countries such as Egypt, Bahrain, Jordan, Morocco, Kuwait, Oman, Tunisia and Saudi Arabia. The established period of the study is 30 years from 1985 to 2015. All related data will be obtained through the World Development Indicators (WDI). The results of this research displays the macroeconomic factors chosen do indeed have mostly a significant impact on Inflation within the scope of this research. Therefore, it would be important to consider these macroeconomic factors to predict, or study, or regulate inflation and deflation in the economies of the selected countries.