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Relationship between inflation rate and economic growth rate of Southeast Asian countries

Author

Listed:
  • Patchnart Rouangsang

    (Chiang Mai University)

  • Chaiwat Nimanussornkul

    (Chiang Mai University)

Abstract

This paper analyses the Panel Granger-causality relationship between GDP growth rate and inflation rate. Using Quaterly data for 5 South-East Asian Countries from 2nd quarter in 1997- 4th quarter in 2011, we conclude that there is clear Granger causality between GDP growth rate and inflation rate and it is one-directional. In addition, Our finding point to positive relationship between GDP growth rate and inflation rate. This result has important policy implications GDP growth rate influences the evolution of inflation rate.

Suggested Citation

  • Patchnart Rouangsang & Chaiwat Nimanussornkul, 2012. "Relationship between inflation rate and economic growth rate of Southeast Asian countries," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 1(3), pages 65-76, September.
    • Handle: RePEc:chi:journl:v:1:y:2012:i:3:p:65-76
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    References listed on IDEAS

    as
    1. Max Gillman & Mark Harris & László Mátyás, 2002. "Inflation and Growth: Some Theory and Evidence," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 D5-1, International Conferences on Panel Data.
    2. Blanchard, Olivier Jean & Kiyotaki, Nobuhiro, 1987. "Monopolistic Competition and the Effects of Aggregate Demand," American Economic Review, American Economic Association, vol. 77(4), pages 647-666, September.
    3. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    4. Lucas, Robert E, Jr & Stokey, Nancy L, 1987. "Money and Interest in a Cash-in-Advance Economy," Econometrica, Econometric Society, vol. 55(3), pages 491-513, May.
    5. Joseph H. Haslag, 1997. "Output, growth, welfare, and inflation: a survey," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II, pages 11-21.
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    More about this item

    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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