This research looks at the e_ect of some economic factors on ination in Ethiopia.Thernstudy was conducted with the target of searching for the relationships that exist betweenrnselected economic variables and ination. Thus, this study employed analysis togetherrnwith Econometric analysis like Johnson co-integration, Vector Error correction modelrn(VECM), Granger causality tests, impulse response and forecast error variance decompo-rnsition to analysis future and short-run relationship between variables. We have estimatedrneconomic variables by using annual statistic data for the amount starting from 1975 torn2019. The empirical results show that real rate of exchange and cash in hand were thernvariables that are found to own a protracted run signi_cant and positive relationship withrnthe ination and government expenditure and also the long term signi_cant and negativernrelationship with the ination. In short run the lagged coe_cient of real charge per unit,rncash in hand and government expenditure incorporates a positive e_ect on ination. Thernerror correction term the adjustment coe_cient found during this study indicates thatrna couple of 12% of the variation within the ination from its equilibrium level is cor-rnrected within a year. The pairwise Granger causality test result suggest that the existencernof strong and signi_cant correlation between a uni- directional causation runs from realrnGDP to ination, funds to ination, government expenditure to ination and inationrnto real exchange rate per unit. .