Journal of Business & Economics Research – May 2008 Volume 6, Number 5
125
Import Response And Inflationary Pressures
In The New Economy: The Quantity
Theory Of Money Revisited
Emmanuel I.
S.
Ajuzie, Lincoln University
Felix M.
Edoho, Lincoln...
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Journal of Business & Economics Research – May 2008 Volume 6, Number 5
125
Import Response And Inflationary Pressures
In The New Economy: The Quantity
Theory Of Money Revisited
Emmanuel I.
S.
Ajuzie, Lincoln University
Felix M.
Edoho, Lincoln University
Wensheng Kang, University of Missouri
Matthew N.
Uwakonye, Grambling State University
Ghebre Y.
Keleta, Grambling State University
ABSTRACT
Contending with the rationale for rate increases to counter inflationary pressures, this study
revisits the quantity theory of money and the equation of exchange developed in the sixteenth
century by the likes of John Locke, John Law, etc.
, and popularized over the years by economists,
such as Adam Smith, David Ricardo, and Irvin Fisher to predict the response of some variables,
especially imports of goods and services, on the rate of inflation.
The vector autoregression
(VAR) process was used to estimate the model.
Results show that import is significant in its
impac
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