Advanced Search
MyIDEAS: Login to save this article or follow this journal

Inflation, the credit market, and economic growth

Contents:

Author Info

  • Niloy Bose

Abstract

This paper presents a model which predicts a negative, non-linear relationship between the rate of inflation and rate of output growth, as observed in many empirical studies. The model describes an economy in which credit market imperfections arise due to asymmetric information between lenders and borrowers. Within this environment, two types of lending regime are possible--a rationing regime, where high and low risk borrowers are separated by means of credit rationing, and a screening regime, where separation takes place through costly information acquisition. An increase in the inflation rate alters lenders' behaviour in such a way (by increasing the incidence of rationing or the level of costly screening, or by switching the lending regime from screening to rationing) that adverse growth effect of inflation is magnified. The analysis provides a basis for the empirical finding that growth effect of inflation may be strongest in some specific range of inflation. Copyright 2002, Oxford University Press.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Article provided by Oxford University Press in its journal Oxford Economic Papers.

Volume (Year): 54 (2002)
Issue (Month): 3 (July)
Pages: 412-434

as in new window
Handle: RePEc:oup:oxecpp:v:54:y:2002:i:3:p:412-434

Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Email:
Web page: http://oep.oupjournals.org/

Order Information:
Web: http://www.oup.co.uk/journals

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Kandil, Magda, 2005. "Money, interest, and prices: Some international evidence," International Review of Economics & Finance, Elsevier, Elsevier, vol. 14(2), pages 129-147.
  2. Hiroki Arato, 2009. "Long-run relationship between inflation and growth in a New Keynesian framework," Economics Bulletin, AccessEcon, vol. 29(3), pages 1863-1872.
  3. Robert Amano & Tom Carter & Kevin Moran, 2012. "Inflation and Growth: A New Keynesian Perspective," CIRANO Working Papers, CIRANO 2012s-20, CIRANO.
  4. Fu-Sheng Hung, 2009. "Explaining the nonlinear effects of financial development on economic growth," Journal of Economics, Springer, Springer, vol. 97(1), pages 41-65, May.
  5. Kim, Dong-Hyeon & Lin, Shu-Chin, 2011. "Nonlinearity in the financial development–income inequality nexus," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 310-325, September.
  6. Phiri, Andrew, 2013. "Inflation and Economic Growth in Zambia: A Threshold Autoregressive (TAR) Econometric Approach," MPRA Paper 52093, University Library of Munich, Germany.
  7. Huang, Ho-Chuan & Lin, Shu-Chin & Kim, Dong-Hyeon & Yeh, Chih-Chuan, 2010. "Inflation and the finance-growth nexus," Economic Modelling, Elsevier, Elsevier, vol. 27(1), pages 229-236, January.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:54:y:2002:i:3:p:412-434. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.