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On the impact of inflation on output growth: Does the level of inflation matter?

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  • López-Villavicencio, Antonia
  • Mignon, Valérie

Abstract

This paper investigates the growth effects of inflation on a wide sample of countries, including both industrialized and emerging economies. Relying upon the estimation of smooth transition and dynamic GMM models for panel data, our findings offer strong evidence that inflation non-linearly impacts economic growth. More specifically, there exists a threshold beyond which inflation exerts a negative effect on growth, and below which it is growth enhancing for advanced countries.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 33 (2011)
Issue (Month): 3 (September)
Pages: 455-464

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Handle: RePEc:eee:jmacro:v:33:y:2011:i:3:p:455-464

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Web page: http://www.elsevier.com/locate/inca/622617

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Keywords: Inflation Economic growth Non-linearity PSTR;

References

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Citations

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Cited by:
  1. Poomjai Nacaskul & Kritchaya Janjaroen & Suparit Suwanik, 2012. "Economic Rationales for Central Banking: Historical Evolution, Policy Space, Institutional Integrity, and Paradigm Challenges," Working Papers 2012-04, Economic Research Department, Bank of Thailand.
  2. Jinzhao Chen & Thérèse Quang, 2012. "International Financial Integration and Economic Growth: New Evidence on Threshold Effects," PSE Working Papers halshs-00710139, HAL.
  3. Chudik, Alexander & Mohaddes, Kamiar & Pesaran, M. Hashem & Raissi, Mehdi, 2013. "Debt, inflation and growth robust estimation of long-run effects in dynamic panel data models," Globalization and Monetary Policy Institute Working Paper 162, Federal Reserve Bank of Dallas.
  4. JUDE, Cristina & LEVIEUGE, Gregory, 2013. "Growth effect of FDI in developing economies: The role of institutional quality," MPRA Paper 49321, University Library of Munich, Germany.
  5. Venky Venkateswaran & Randall Wright, 2013. "Pledgability and Liquidity: A New Monetarist Model of Financial and Macroeconomic Activity," NBER Working Papers 19009, National Bureau of Economic Research, Inc.
  6. Escobari, Diego & Mollick, André Varella, 2013. "Output Growth and Unexpected Government Expenditures," MPRA Paper 48969, University Library of Munich, Germany.
  7. repec:hal:wpaper:halshs-00710139 is not listed on IDEAS
  8. Breuer, Janice Boucher & McDermott, John, 2013. "Economic depression in the world," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 227-242.
  9. Cristina Jude & Grégory Levieuge, 2014. "Growth Effect of FDI in Developing Economies: the Role of Institutional Quality," Working Papers halshs-01014404, HAL.
  10. Eggoh, Jude C. & Khan, Muhammad, 2014. "On the nonlinear relationship between inflation and economic growth," Research in Economics, Elsevier, vol. 68(2), pages 133-143.
  11. Burkhard Heer & Alfred Maussner, 2011. "The Cash-In-Advance Constraint in Monetary Growth Models," CESifo Working Paper Series 3647, CESifo Group Munich.

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