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Do fiscal deficits cause inflation? Evidence from Suriname
Gavin Ooft* 
Article | Year: 2025 | Pages: 153 - 179 | Volume: 49 | Issue: 1 Received: February 6, 2024 | Accepted: June 17, 2024 | Published online: March 10, 2025
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FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
LICENCING
PDF
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Commodity-price
shock
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Fiscal
shock
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Money
shock
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Exchange
rate shock
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Output
shock
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Inflation
shock
|
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Fiscal balance
|
+/-
|
+
|
0
|
0
|
0
|
0
|
|
Money supply
|
+/-
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-
|
+
|
0
|
0
|
0
|
|
Exchange rate
|
+/-
|
-
|
+
|
+
|
0
|
0
|
|
Output growth
|
+/-
|
+
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-
|
-
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+
|
0
|
|
Inflation
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+/-
|
-
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+
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+
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+
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+
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Source: Author’s elaboration.
Note: Changes reflect year-on-year changes. The market exchange rate entails the USD/SRD exchange
rate on the parallel market. This data is gathered from the CBvS, foreign exchange bureaus, and local
newspapers. In the years before the parallel market emerged, the market exchange rate equalled the
official exchange rate. Sources: Author using data from the CBvS, GBS, Ministry of Finance Suriname, World Bank.
Note: The impulse responses depict responses to SVAR innovations with 95% confidence intervals
using analytical asymptotic standard errors. Source: Author’s calculations.
Note: The impulse responses depict responses to SVAR innovations with 95% confidence intervals
using analytical asymptotic standard errors. Source: Author’s calculations.
Source: Author’s calculations.
Source: Author’s calculations.
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Indicator
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Definition
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Source(s)
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ER
|
Year-on-year change in the market exchange rate (in
%)
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Newspapers, CBvS
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FBGDP
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Fiscal balance scaled to nominal GDP (in %)
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Ministry of Finance Suriname, CBvS
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GR
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Volume growth of GDP (in %)
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GBS, CBvS
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INFL
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Year-on-year change in the CPI (in %)
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GBS, CBvS
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M1GDP
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Money supply scaled to nominal GDP (in %)
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CBvS
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XE
|
Energy commodity prices (year-on-year change, in %)
|
World Bank Prospects Group
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XNE
|
Non-energy commodity prices (year-on-year change, in
%)
|
World Bank Prospects Group
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ER
|
FBGDP
|
GR
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INFL
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M1GDP
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XE
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XNE
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Mean
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-2.58
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-5.77
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2.54
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29.15
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29.61
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3.62
|
4.40
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Median
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-4.02
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-5.00
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2.80
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8.40
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25.05
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3.61
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4.44
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Maximum
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3.46
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26.60
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19.20
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586.50
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83.78
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5.01
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4.84
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Minimum
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-6.32
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-25.50
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-16.00
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-7.60
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14.88
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2.12
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4.01
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Std.
dev.
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3.56
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8.10
|
5.39
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79.15
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16.58
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0.84
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0.22
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Skewness
|
0.19
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0.29
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-0.34
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5.93
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1.87
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-0.39
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-0.28
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Kurtosis
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1.31
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6.17
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5.13
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40.95
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5.84
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2.03
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1.97
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Jarque-Bera
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7.83
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27.32
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13.09
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4148.86
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57.90
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4.05
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3.58
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Probability
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0.02
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0.00
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0.00
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0.00
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0.00
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0.13
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0.17
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Observations
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63
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63
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63
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63
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63
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63
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63
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Levels
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ADF
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FBGDP
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M1GDP
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ER
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GR
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INFL
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XE
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XNE
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With
constant
|
t-Stat
|
-4.18***
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-2.77*
|
0.43
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-4.95***
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-5.39***
|
-1.07
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-1.51
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Prob.
|
0.00
|
0.07
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0.98
|
0.00
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0.00
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0.72
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0.52
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With
constant & trend
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t-Stat
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-4.15***
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-2.89
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-2.16
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-5.35***
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-5.42***
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-2.10
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-0.72
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Prob.
|
0.01
|
0.17
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0.50
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0.00
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0.00
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0.54
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0.97
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First
difference
|
ADF
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d(FBGDP)
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d(M1GDP)
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d(ER)
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d(GR)
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d(INFL)
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d(XE)
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d(XNE)
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With
constant
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t-Stat
|
-11.47***
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-5.24***
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-4.55***
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-9.26***
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-8.38***
|
-7.20***
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-7.47***
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Prob.
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
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With
constant & trend
|
t-Stat
|
-11.38***
|
-5.20***
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-4.73***
|
-9.17***
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-8.31***
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-7.13***
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-7.63***
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Prob.
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
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Source: Author’s calculations.
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Levels
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PP
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FBGDP
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M1GDP
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ER
|
GR
|
INFL
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XE
|
XNE
|
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With
constant
|
t-Stat
|
-4.12***
|
-2.05
|
0.81
|
-4.88***
|
-5.33***
|
-1.07
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-1.48
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Prob.
|
0.00
|
0.27
|
0.99
|
0.00
|
0.00
|
0.72
|
0.54
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With
constant & trend
|
t-Stat
|
-4.09**
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-2.19
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-1.95
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-5.30***
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-5.36***
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-2.18
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-1.09
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Prob.
|
0.01
|
0.49
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0.62
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0.00
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0.00
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0.49
|
0.92
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First
difference
|
PP
|
d(FBGDP)
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d(M1GDP)
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d(ER)
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d(GR)
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d(INFL)
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d(XE)
|
d(XNE)
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With
constant
|
t-Stat
|
-14.83***
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-5.37***
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-4.48***
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-17.43***
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-35.37***
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-7.20***
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-6.97***
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Prob.
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
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With
constant & trend
|
t-Stat
|
-14.08***
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-5.33***
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-4.66***
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-17.24***
|
-34.90***
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-7.13***
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-7.11***
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Prob.
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
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Notes: PP denotes the Phillips-Perron unit root test. (*) Significant at the 10%; (**) Significant at the 5%; (***) Significant at the 1%. Source: Author’s calculations.
Note: The impulse responses depict responses to SVAR innovations with 95% confidence intervals
using analytical asymptotic standard errors. Source: Author’s calculations.
Note: The bias-adjusted impulse response functions present the responses of inflation to various
shocks using Kilian’s unbiased bootstrap with 500 bootstrap repetitions and 500 double bootstrap
repetitions. The shaded area corresponds to a 95% confidence interval. Source: Author’s calculations.
Note: The bias-adjusted impulse response functions present the responses of inflation to various
shocks using Kilian’s unbiased bootstrap with 500 bootstrap repetitions and 500 double bootstrap
repetitions. The shaded area corresponds to a 95% confidence interval. Source: Author’s calculations.
Source: Author’s calculations.
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Null
hypothesis: Residuals are multivariate normal
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Equation
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Jarque-Bera
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df
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Prob.
|
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1
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9.88
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2
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0.01
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2
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19.21
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2
|
0.00
|
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3
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1.77
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2
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0.41
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4
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1.32
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2
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0.52
|
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5
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3.83
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2
|
0.15
|
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6
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3.24
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2
|
0.20
|
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Joint
|
39.27
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12
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0.00
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March, 2025
I/2025
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