Inflation variability and the relationship between inflation and growth
AbstractWe examine the effect of inflation variability and economic growth using annual historical data on both developing and developed countries. The data cover 182 developing countries and 31 developed countries for the period 1961-2009. Proxying inflation variability by the five-year coefficient of variation of inflation, we obtain the following results: (1) For developing countries, there is significant evidence to suggest that when the rate of inflation exceeds 10 percent inflation variability has a negative effect on economic growth. (2) For developed countries, there is no significant evidence that inflation variability is detrimental to growth.
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Bibliographic InfoPaper provided by The Australian National University, Australia South Asia Research Centre in its series ASARC Working Papers with number 2011-08.
Date of creation: 2011
Date of revision:
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Inflation; Growth; Threshold; Variablity;
Other versions of this item:
- Raghbendra Jha & Tu Ngoc Dang, 2012. "Inflation variability and the relationship between inflation and growth," Macroeconomics and Finance in Emerging Market Economies, Taylor and Francis Journals, vol. 5(1), pages 3-17, July.
- Raghbendra Jha & Tu Dang, 2011. "Inflation variability and the relationship between inflation and growth," CAMA Working Papers 2011-08, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-16 (All new papers)
- NEP-CBA-2011-09-16 (Central Banking)
- NEP-FDG-2011-09-16 (Financial Development & Growth)
- NEP-MAC-2011-09-16 (Macroeconomics)
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