A Note on the Link Between Inflation and Output Variability in Canada
AbstractOne of the costs of high levels of in ation may be misperceptions of relative prices and excessive volatility in sectoral output. This paper therefore examines the relationship between the level of inflation and sectoral output growth variability in Canada from 1961:1 to 1995:4. Despite the substantial variation in inflation over this period, we find little evidence of an impact of the level of in ation on variability of sectoral output growth. Our results indicate that the oil price, and the real exchange rate are significantly correlated with the variability of output growth across sectors.
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Bibliographic InfoPaper provided by Dalhousie, Department of Economics in its series Department of Economics at Dalhousie University working papers archive with number jmcb97.
Length: 21 pages
Date of creation: 18 Feb 1998
Date of revision:
inflation; output variability; Canada;
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
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