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Inflation, inflation uncertainty and output in Tunisia

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  • Hachicha, Ahmed
  • Lean Hooi Hooi

Abstract

This study investigates the relationship between inflation, inflation uncertainty and output in Tunisia using real and nominal data. GARCH-in-mean model with lagged variance equation is employed for the analysis. The result shows that inflation uncertainty has a positive and significant effect on the level of inflation only in the real term. Moreover, inflation uncertainty Granger-causes inflation and economic growth respectively. These results have important implications for the monetary policy in Tunisia. --

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2013-1.

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Date of creation: 2013
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Handle: RePEc:zbw:ifwedp:20131

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Keywords: GARCH-M model; inflation; inflation uncertainty; output;

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