Conflict economy faces 22% higher inflation due to foreign exchange market
The article models how inflation works in a country with conflicts and a black market for foreign currency. By studying data from Sudan between 2008 and 2013, the researchers found that government spending is the main cause of inflation. They also discovered that the country's inflation rate is actually 22% higher than officially reported. To control inflation, it's important to limit how much money the government creates and have a more flexible exchange rate for foreign currency.