The Relationship Between Imports and Inflation in Palestine: Toda and Yamamoto Causality Analysis

Abstract

The amid of this study empirically analyzes the dynamic relationship between Imports and Inflation in Palestine. The study use daily data from of first quarter on 1996 to fourth quarter 2016. Used the Toda and Yamamoto (1995) causality test.The study found that the null hypothesis that the All Share INF does not cause the IMP is rejected, while the INF rate does not because IMP is not rejected at 5% significate level. The study recommended. There is need to decrease the imports for decreasing inflation in Palestine.