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Inflation and Growth: An Estimate of the Threshold Level of Inflation in Pakistan

Author

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  • Yasir Ali Mubarik

    (State Bank of Pakistan)

Abstract

This study estimates the threshold level of inflation in Pakistan [à la Khan and Senhadji (2001)] using annual dataset from 1973 to 2000. The estimated model suggests 9 percent threshold level of inflation above which inflation is inimical for economic growth.

Suggested Citation

  • Yasir Ali Mubarik, 2005. "Inflation and Growth: An Estimate of the Threshold Level of Inflation in Pakistan," SBP Research Bulletin, State Bank of Pakistan, Research Department, vol. 1, pages 35-44.
  • Handle: RePEc:sbp:journl:03
    as

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    File URL: http://www.sbp.org.pk/repec/sbp/journl/Article-3.pdf
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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. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    3. Anthony Philip Thirlwall & A.C. Barton, 1971. "Inflation and growth: the international evidence," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 24(98), pages 263-275.
    4. Michael Bruno & William Easterly, 1996. "Inflation and growth: in search of a stable relationship," Review, Federal Reserve Bank of St. Louis, vol. 78(May), pages 139-146.
    5. By Mohsin S. Khan & Abdelhak S. Senhadji, 2001. "Threshold Effects in the Relationship Between Inflation and Growth," IMF Staff Papers, Palgrave Macmillan, vol. 48(1), pages 1-1.
    6. Fischer, Stanley, 1993. "The role of macroeconomic factors in growth," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 485-512, December.
    7. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    8. Kevin S. Nell, 2000. "Is Low Inflation a Precondition for Faster Growth? The Case of South Africa," Studies in Economics 0011, School of Economics, University of Kent.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation; economic growth; causality.;
    All these keywords.

    JEL classification:

    • 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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