Measurement impact of Real, Financial and Monetary Variables on Inflation rate in Sudan within the period 1990- 2020 by using Autoregressive Distributed Lag Model (ARDL)

Abstract

The study aimed to measuring impact of real, financial and monetary variables on inflation in Sudan within the period 1990-2020, to achieve this goal a standard model for the relationship between the variables of the study was formulated and constructed. The data of this study was collected from Central bank of Sudan and Ministry of Finance reports. The study adopts the descriptive method coupled with econometrics tools to reach its goal and achieve its hypothesis, also study used the method of co-integration, Error Correction model (ECM) and Augment-Dickey-fuller (ADF) test to estimate the relationship between variables of the study. The results show that there is a correlation between the variables. The study main findings indicated the existence of a statistically negative relationship between GDP and inflation, and negative relationship between exchange rate and inflation, and negative relationship between exports and inflation, and positive relationship between monetary supply and inflation, and positive relationship between government expenditure. The study findings out that increase exchange rate with 1% that leads to a decrease in inflation rates by 1.6%. The study recommends a deflation financial and monetary policies, increase of production particularly the agricultural sector product, monitor the mining and export of gold. Keywords: Autoregressive model, Financial and Monetary variables, Inflation, Measurement.