This paper analyses the dynamics of inflation in Kenya during 1974–96, a period characterized by external shocks and … exchange rate, foreign prices, and terms of trade have long-run effects on inflation, while the money supply and interest rate … only have short-run effects. The dynamics of inflation are also found to be influenced by food supply constraints. Moreover …

, relative productivity, the trade balance and terms of trade. Countries with higher productivity, trade deficits or improved … terms of trade are found to have more appreciated real exchange rates, with the main channel of transmission working through … the relative price of nontraded goods. Exogenous terms of trade shocks are found to be the most important determinant of …

study has employed a dynamically simulated autoregressive distributed lag (ARDL) cointegration approach, which shows a well …-specified and stable money demand in India after incorporating the inflation forecast variable as one of the essential determinants … aggregate, in the ongoing flexible inflation targeting framework, as one of the essential information or indicator variables …