Commonalities in the Movements of Inflation Rates among Countries in the East African Community

Figures & data

Figure 1. Annual inflation rates for the EAC countries (1996–2018).

Inflation rates are measured as the annual percentage change of the consumer price index. Stata version 15.1 was used to generate this figure. Source: World Development Indicators (World Bank , 2019).

Table 1. Regression results based on the model in Equation (10)(10) $Sim{\pi }_{ijt}={\beta }_0+{\beta }_{1}t+{\epsilon }_{ijt}$(10)

	No seasonal adjustment		With seasonal adjustment
Country pairs	Time coefficient	Constant coefficient	Time coefficient	Constant coefficient
Kenya-Burundi	0.008*** (0.002)	−3.367*** (0.352)	0.007*** (0.002)	−3.062*** (0.364)
Kenya-Rwanda	0.002* (0.001)	−1.624*** (0.188)	0.002** (0.001)	−1.505*** (0.183)
Kenya-Tanzania	0.005*** (0.001)	−1.945*** (0.150)	0.003*** (0.001)	−1.433*** (0.142)
Kenya-Uganda	0.004*** (0.001)	−1.936*** (0.152)	0.003*** (0.001)	−1.492*** (0.123)
Rwanda-Burundi	0.007*** (0.002)	−3.382*** (0.380)	0.007*** (0.002)	−3.015*** (0.367)
Tanzania-Burundi	0.009*** (0.002)	−3.482*** (0.346)	0.007*** (0.002)	−2.933*** (0.354)
Tanzania-Rwanda	0.002* (0.001)	−1.659*** (0.163)	0.000 (0.001)	−0.981*** (0.150)
Tanzania-Uganda	0.007*** (0.001)	−2.340*** (0.171)	0.003*** (0.001)	−1.334*** (0.125)
Uganda-Burundi	0.008*** (0.002)	−3.380*** (0.345)	0.007*** (0.002)	−2.947*** (0.342)
Uganda-Rwanda	0.002** (0.001)	−1.737*** (0.170)	0.001 (0.001)	−1.378*** (0.175)

Newey and West (1987) robust standard errors (i.e., heteroscedasticity- and autocorrelation-consistent standard errors) are shown in parentheses. The *, **, and *** superscripts indicate significance at the 10%, 5% and 1% levels, respectively. The results are for country pairs (each pair is shown in the first column). The number of observations is 283 from the period 1995M05-2018M12.

Figure 2. Rolling Kendall’s tau among EAC countries.

Rolling 5-year Kendall’s tau on monthly inflation between each EAC member and the other EAC members (weighted by GDP) (top) and p-values (bottom) representing significance from having zero correlation. The data used are from 1995:5 to 2018:12. The figure reports the information for the midpoint (31st month of 60 months) of the 5-year spans, with the starting digit of the year placed where the first month of that year stands.

World Bank. 2019. World development indicators. Accessed March 26, 2019. https://databank.worldbank.org/source/world-development-indicators#.

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