Egyptian Inflation Soars Due to Shocks in Liquidity and Exchange Rates
The study looked at what causes inflation in Egypt from 1991 to 2012. They used a special math model to analyze the data. The results showed that when things like money supply, economic growth, exchange rates, and food prices go up, inflation also goes up. People's expectations about inflation can also make it worse. In the short term, inflation is mostly affected by its own changes, followed by economic growth, money supply, and the value of the Egyptian pound compared to the US dollar. Over a 5-year period, more than half of inflation is influenced by factors other than people's expectations about inflation.