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Abstract
To develop effective inflation control policies, it is essential to thoroughly examine all the underlying dynamics that lead to inflation. In this context, monetary and non-monetary factors, such as real economic growth, external debt, public spending, imports, and structural economic problems, must be considered. This study examines the monetary and non-monetary causes of inflation in Kyrgyzstan within a theoretical framework and analyzes the effects of both groups of factors on inflation empirically. The ARDL model was used with quarterly data from 2007Q1 to 2024Q3. According to the study' findings, monetary causes of inflation, such as the money supply and nominal interest rates, have an inflationary effect. An appreciation in the exchange rate, on the other hand, has a deflationary effect. A review of non-monetary factors reveals that public spending and economic growth can lead to inflation in the long term. On the other hand, imports and external debt can have a deflationary effect, provided that the budget deficit is kept under control. Balanced monetary policy and fiscal discipline are important for controlling inflation in the long term.
