Determinants of Inflation and its Instability in Sudan 1970-1994

During the past three decades inflation in Sudan accelerated and was highly variable. Various factors contributed to this acceleration and variability. Predominant amond these is the monetary financing of a persistent budget deficit in the country. Other real, expectational and structural factors also contributed to the incidence of this high inflation episode witnessed in the country. This paper investigates the sources of instability in both the mean and variance of inflation.