Modeling the determinants of inflation in sudan using generalized method of moments for the period 2000-2017

This paper aims to modeling the determinants of inflation in Sudan via GMM method for the period 2000-2017to help in formulating an effective decreasing inflation rate policy. The paper focused on Gross Domestic Product (GDP), Government Expenditure(GE), Exchange Rate (EX), Consumer Price Index (CPI), Unemployment Rate (UR),and Money Supply (MS)as they are the most important determinants of inflation in Sudan. The paper is based on the following assumptions: the Gross Domestic Product, Unemployment Rate and Government Expenditure well effect negatively on inflation rate, and also there is effect positively between the Inflation Rate and Exchange Rate, Money Supply, and Consumer Price Index. The paper has reached the following conclusions: that the increase in money supply and Consumer Price Index lead to an increasing inflation rate. The reduction of the exchange rate leads to a high rate of inflation. However the increasing in Gross Domestic Product, Unemployment Rate, and Government Expenditure lead to decreasing inflation rate in Sudan. The Generalized Method of Moment is the best Method for estimating the determinants of inflation in Sudan. The paper recommended that the state should adopt effective financial and monetary policy for reducing the increasing in inflation rate and increased production for exporting.