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Revisiting the Relationship between Inflation and Growth: A Note on the Role of Exchange Rate Regimes

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  • Andrew Abbott
  • Glauco De Vita
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    Abstract

    Drawing from recent advances in the classification of exchange rate regimes, this note revisits empirically the relationship between inflation and growth under alternative exchange rate regimes. The results, based on a panel of 125 industrialised and developing countries over the period 1980-2004, indicate that the costs of inflation for economic growth are significant only in the case of developing countries, and are higher for floating exchange rates than they are under fixed or intermediate regimes.

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    File URL: http://www.economicissues.org.uk/Files/2011/111cabbott+.pdf
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    Article provided by Economic Issues in its journal Economic Issues.

    Volume (Year): 16 (2011)
    Issue (Month): 1 (March)
    Pages: 37-52

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    Handle: RePEc:eis:articl:111cabbott
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    7. Husain, Aasim M. & Mody, Ashoka & Rogoff, Kenneth S., 2005. "Exchange rate regime durability and performance in developing versus advanced economies," Journal of Monetary Economics, Elsevier, vol. 52(1), pages 35-64, January.
    8. Carmen M. Reinhart & Kenneth S. Rogoff, 2004. "The Modern History of Exchange Rate Arrangements: A Reinterpretation," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 1-48.
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    11. De Gregorio, Jose, 1992. "Economic growth in Latin America," Journal of Development Economics, Elsevier, vol. 39(1), pages 59-84, July.
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    Cited by:

    1. VELICU, Ileana Cosînzeana, 2012. "Financing Resources Available For Local Economic Development," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 3(1), pages 25-36.

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