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Is There A Case For Low Inflation‐Induced Productivity Growth In Selected Asian Economies?

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  • RENUKA MAHADEVAN
  • JOHN ASAFU‐ADJAYE

Abstract

The authors examine the evidence on the relationship between inflation and productivity growth for nine Asian economies using causality analysis in a multivariate model with money supply as a possible effective monetary policy tool. The inflation‐productivity growth relationship is found to be non‐uniform, as the evidence of uni‐directional, bi‐directional, and no causality between the two variables is varied and significant for some countries and insignificant for others. An attempt is made to explain the inflation‐productivity nexus for these countries and to discuss implications for anti‐inflationary policies such as inflation targeting. (JEL E31, O47, C32)

Suggested Citation

  • Renuka Mahadevan & John Asafu‐Adjaye, 2006. "Is There A Case For Low Inflation‐Induced Productivity Growth In Selected Asian Economies?," Contemporary Economic Policy, Western Economic Association International, vol. 24(2), pages 249-261, April.
    • Handle: RePEc:bla:coecpo:v:24:y:2006:i:2:p:249-261
    DOI: 10.1093/cep/byj018
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    Cited by:

    1. Chiou-Wei, Song-Zan & Zhu, Zhen & Chen, Sheng-Hung & Hsueh, Sheng-Pin, 2016. "Controlling for relevant variables: Energy consumption and economic growth nexus revisited in an EGARCH-M (Exponential GARCH-in-Mean) model," Energy, Elsevier, vol. 109(C), pages 391-399.
    2. Saten Kumar & Don J. Webber & Geoff Perry, 2012. "Real wages, inflation and labour productivity in Australia," Applied Economics, Taylor & Francis Journals, vol. 44(23), pages 2945-2954, August.
    3. Nagayasu, Jun, 2009. "Regional Inflation in China," MPRA Paper 24722, University Library of Munich, Germany.
    4. Chaido Dritsaki, 2016. "Real wages, inflation, and labor productivity: Evidences from Bulgaria and Romania," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 4(5), pages 24-36, October.

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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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