Ethiopia has experienced a historically unprecedented increase in inflation, mainly driven by cereal price inflation … models to identify the relative importance of several factors contributing to overall inflation and its three major … supply shocks and inflation inertia strongly affect domestic inflation, causing large deviations from long-run price trends …

inflation emanates from movements in the exchange rate, foreign prices, and terms of trade. The error correction term for the … monetary sector does not enter the model, but money supply and the interest rate influence inflation in the short run …. Inflation inertia is found to be an important determinant of inflation up until 1993, when about 40% of the current inflation is …

tentative, our scenarios show that inflation will decrease substantially though inflation inertia may prevent a rapid … stabilization of food prices. One of the main driving forces behind domestic inflation is agricultural output growth. While exchange …