Effects of Policy Response During the COVID-19 Crisis: A Monetarist Analysis of Uganda.

Okware’s paper, Effects of Policy Response During the COVID‑19 Crisis: A Monetarist Analysis of Uganda, examines how Uganda’s fiscal and monetary responses to the pandemic, characterized by heavy stimulus spending and sharp monetary easing, triggered rapid broad money growth, soaring public debt, and ultimately post‑COVID inflation. His key findings show that M3 growth surged to record highs in 2020, well above optimal levels, and that this expansion translated into higher nominal spending and inflation, peaking at 10.7% in October 2022. He concludes that Uganda’s inflation was primarily a monetary phenomenon, consistent with Friedman’s quantity theory of money, and that the Bank of Uganda’s reactive tightening eventually stabilized inflation at moderate levels.

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