Inflation in Afghanistan: Structural causes and possible solutions

The aim of choosing this thesis topic is to determine the structural causes and possible solutions of inflationary stresses, which are a serious economic problem in Afghanistan. In the last decade, the inflation problem in Afghanistan has been one of the most controversial issues that has attracted the attention of scientists, policy makers and the general public. With the rapid increase in inflation in recent years, the dissatisfaction of the public has increased and due to this dissatisfaction, various contradictory analyzes have been presented. The views emphasized and supported by government officials regarding the external source of inflation together with the presentation of the Central Bank's inflation report caused widespread reflections in the country. The main causes of inflation in this report and it's analyzes are Internal structural reasons such as external factors (imported inflation), existence of economic monopoly, legal vacuum, corruption and lack of understanding in inter-institutional monetary policy. In the aforementioned reports and analyzes, among the possible solutions for inflation; Measures such as enacting anti-monopoly laws, reviewing foreign trade policies, making reforms in all sectors (agriculture, industry, etc.), applying reductions in customs tariffs, implementing policies that encourage production, and making the Central Bank of Afghanistan a more efficient structure are listed. In the conclusion part of this study, some solution suggestions were made based on the analysis and determinations of the subject. Four different econometric test methods were used in this study. These are respectively; seasonality adjustment, Unit Root Test, ARDL Bounds Test and Toda yamamoto Causality Test. Econometric analyzes show that there are some relationships between the variables examined, both in the short-term and long-term. These relationships are discussed in detail in the Findings Section of the study. Keywords; Afghanistan, Inflation, Central Bank, Corruption, Monopoly, Monetary Policy, ECM (Error Correction Model), ARDL (Autoregressive-Distributed Lag), Unit root.