The study looked at inflation in Lesotho from 1980 to 2010. They found that factors like inflation inertia, output gap, and South African prices affect long-term inflation. Money supply, exchange rates, and government spending don't have a big impact. Inflation in Lesotho stays high because of slow adjustments in wages and prices. Short-term inflation changes are due to policy shifts and outside influences. Lesotho uses fiscal policy to keep the economy stable since it has a fixed exchange rate. Balancing price stability and economic growth needs cooperation between money and fiscal policies.