DDP 754. Per-Åke Andersson and Boo Sjöö. "Controlling Inflation During Structural Adjustment: The Case of Zambia." February 2000. 23 pp.

This paper analyses the relation between money and inflation during the structural adjustment program (SAP) in Zambia, 1987-1993. In contrast to many other studies of inflation in developing countries, this study focuses on a sample period relevant for SAPs and does not include pre-SAP monetary regimes. The results suggest that prices were driven by money, and that the authorities were able to reduce inflation by restricting the money supply process during the program.

Keywords: cointegration, inflation, structural adjustment

JEL Codes: C32, E50, E65

Per-Åke Andersson is project associate of the Harvard Institute for International Development. He is working in Mozambique at the Capacity Building in Economic Decision-Making Project. He holds a Ph.D. in Economics from Göteborg University, Sweden.

Boo Sjöö is an Associate Professor in Finance and Econometrics at University of Skövde and Göteborg University, Sweden. He has been involved in the joint MBA program in economics organised by A.E.R.C. This paper was written while he was a Visiting Assistant Professor at McGill University.

The authors would like to thank Steve Kayizzi-Mugerwa and Tom Willet for helpful comments and suggestions. Remaining errors are our responsibility.