Inflation in COMESA, contagion effect. Case study of Madagascar

Abstract

How the economies of the member countries of the Regional Economic Communities (REC) A crucial issue that deserves to be raised as these countries seek macroeconomic convergence. It is important to know which country represents the greatest risk of inflation transmission. The empirical literature on the analysis of the extent of inflation transmission remains very mixed. This article proposes to answer this question by taking the case of Madagascar within COMESA, The results show that Mauritius and Egypt present the most risk given the extent of foreign trade conducted by Madagascar with these countries. Price increases within the CER are transmitted more quickly to domestic prices than to declines. At the end of this study, one question persists, does foreign trade alone explain imported inflation?