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Inflation and Growth: An Estimate of the Threshold Level of Inflation in Pakistan

Author

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  • Yasir Ali Mubarik

    (State Bank of Pakistan)

Abstract

This study estimates the threshold level of inflation in Pakistan [à la Khan and Senhadji (2001)] using annual dataset from 1973 to 2000. The estimated model suggests 9 percent threshold level of inflation above which inflation is inimical for economic growth.

Suggested Citation

  • Yasir Ali Mubarik, 2005. "Inflation and Growth: An Estimate of the Threshold Level of Inflation in Pakistan," SBP Research Bulletin, State Bank of Pakistan, Research Department, vol. 1, pages 35-44.
    • Handle: RePEc:sbp:journl:03
    as

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    File URL: http://www.sbp.org.pk/repec/sbp/journl/Article-3.pdf
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    References listed on IDEAS

    as
    1. Max Gillman & Mark Harris & László Mátyás, 2002. "Inflation and Growth: Some Theory and Evidence," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 D5-1, International Conferences on Panel Data.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Anthony Philip Thirlwall & A.C. Barton, 1971. "Inflation and growth: the international evidence," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 24(98), pages 263-275.
    4. Michael Bruno & William Easterly, 1996. "Inflation and growth: in search of a stable relationship," Review, Federal Reserve Bank of St. Louis, vol. 78(May), pages 139-146.
    5. By Mohsin S. Khan & Abdelhak S. Senhadji, 2001. "Threshold Effects in the Relationship Between Inflation and Growth," IMF Staff Papers, Palgrave Macmillan, vol. 48(1), pages 1-1.
    6. Fischer, Stanley, 1993. "The role of macroeconomic factors in growth," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 485-512, December.
    7. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    8. Kevin S. Nell, 2000. "Is Low Inflation a Precondition for Faster Growth? The Case of South Africa," Studies in Economics 0011, School of Economics, University of Kent.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation; economic growth; causality.;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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