Assessing The Risks Of Imported Inflation In The IOC: Case Study Of Madagascar

Jean Lucien Razafindrakoto


How the economies of the member countries of the Indian Ocean Commission (IOC) respond to price shocks in the markets of other member countries is an important question that deserves to be raised, even if the level of imports into the region is low. 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 paper sets out to answer this question, taking the case of Madagascar. The results show that Mauritius presents the greatest risk, given the level of imports Madagascar makes with this country. Price rises in Mauritius are transmitted more rapidly to Madagascar than to other countries. At the end of our paper, one question remains: does foreign trade alone explain imported inflation?


IOC, external shocks, Inflation, Madagascar, Transmission,

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