Relationship between inflation and economic growth in Azerbaijani economy: is there any threshold effect?
AbstractThe study examines possibility of threshold effect of inflation on economic growth over the period of 2000-2009. Estimated threshold model indicates that there is a non-linear relationship between economic growth and inflation in the Azerbaijani economy and threshold level of inflation for GDP growth is 13 percent. Below threshold level inflation has statistically significant positive effect on GDP growth, but this positive relationship becomes negative one when inflation exceeds 13 percent. Results of the study may be useful for monetary policymakers in terms of keeping inflation below the threshold level of 13 percent to prevent its negative effect on economic growth.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 33494.
Date of creation: Jun 2011
Date of revision:
Publication status: Published in Asian Journal of Business and Management Sciences No1.1(2011): pp. 1-11
Azerbaijani Economy; Inflation; Economic Growth; Gross Fixed Capital Formation; Threshold Level;
Find related papers by JEL classification:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-22 (All new papers)
- NEP-CIS-2011-10-22 (Confederation of Independent States)
- NEP-FDG-2011-10-22 (Financial Development & Growth)
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