Cyclical and Causal Patterns of Inflation and GDP Growth
AbstractEmpirical foundations for the view that high inflation impairs GDP growth are examined using annual data for 115 countries over the period 1960-1995. Taking into account country heterogeneity and time-specific symmetric shocks, as well as endogeneity of inflation and dynamics of GDP growth we estimate dynamic panel-data models of the effects of inflation on growth. We find no evidence supporting the view that inflation is in general harmful to GDP growth. On the other hand, there is a negative correlation between contemporaneous intra-country inflation and growth for periods characterised by positive oil-price shocks.
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Bibliographic InfoPaper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2002:5.
Length: 25 pages
Date of creation: 08 Feb 2002
Date of revision:
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Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden
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Fax: +46 8 16 14 25
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GDP GROWTH; Inflation;
Other versions of this item:
- Mahmood Arai & Mats Kinnwall & Peter Skogman Thoursie, 2004. "Cyclical and causal patterns of inflation and GDP growth," Applied Economics, Taylor & Francis Journals, vol. 36(15), pages 1705-1715.
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
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