The African Financial Review July-August 2014 | Page 15

and inflation rate in WAMZ. Our findings shows that a 100%
increase (decrease) in income leads to 66.7% rise (fall) in inflation.
This implies that increased income stimulates production, which
tends to increase the aggregate demand and thus bring about
increased inflation in WAMZ. This finding is in line with our
a-priori expectation and in tandem with finding of Kaehler
(2010). Own interest rate exerts a negative impact on inflation
in WAMZ. The own inters rate captures the opportunity cost

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