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Monetary policy, banking, and growth


  • Haslag, Joseph H.


There is ample empirical evidence suggesting that countries with high inflation tend to grow slower than countries with low inflation. Based on the regression evidence, the inflation-rate effect is fairly large; on average, per-capita real GDP grows between $71 and $76 percentage points slower in a country in which the average inflation rate is 10 percent as compared with a country in which inflation is 0 percent. The purpose of this paper is to determine whether a model economy that is reasonably calibrated can account for such large inflation-rate effects. The answer is yes. Copyright 1998 by Oxford University Press.
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  • Haslag, Joseph H., 1995. "Monetary policy, banking, and growth," Working Papers 9515, Federal Reserve Bank of Dallas.
  • Handle: RePEc:fip:feddwp:95-15 Note: Published as: Haslag, Joseph H. (1998), "Monetary Policy, Banking, and Growth," Economic Inquiry 36 (3): 489-500.

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    References listed on IDEAS

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    Cited by:

    1. Shouyong Shi & Mariana Rojas Breu & Aleksander Berentsen, 2009. "Liquidity and Growth," 2009 Meeting Papers 590, Society for Economic Dynamics.
    2. Manamba EPAPHRA, 2016. "Nonlinearities in Inflation and Growth Nexus: The Case of Tanzania," Journal of Economics and Political Economy, KSP Journals, vol. 3(3), pages 471-512, September.
    3. Rangan Gupta, 2005. "Financial Liberalization and Inflationary Dynamics," Working papers 2005-31, University of Connecticut, Department of Economics.
    4. Gupta, Rangan, 2008. "Tax evasion and financial repression," Journal of Economics and Business, Elsevier, vol. 60(6), pages 517-535.
    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.
    6. Robert Amano & Tom Carter & Kevin Moran, 2012. "Inflation and Growth: A New Keynesian Perspective," CIRANO Working Papers 2012s-20, CIRANO.
    7. Max Gillman & Michal Kejak, 2005. "Inflation and Balanced-Path Growth with Alternative Payment Mechanisms," Economic Journal, Royal Economic Society, vol. 115(500), pages 247-270, January.
    8. Fernandez, Esther, 2005. "Distorting taxes and interest on reserves," Economic Modelling, Elsevier, vol. 22(6), pages 975-1000, December.
    9. Slavtcheva, Dessislava, 2015. "Financial development, exchange rate regimes and productivity growth: Theory and evidence," Journal of Macroeconomics, Elsevier, vol. 44(C), pages 109-123.
    10. O'Reilly, B., 1998. "The Benefits of Low Inflation: Taking Shock "A nickel ain't worth a dime any more" [Yogi Berra]," Technical Reports 83, Bank of Canada.
    11. Rangan Gupta, 2007. "Financial Liberalization and Inflationary Dynamics: An Open Economy Analysis," International Economic Journal, Taylor & Francis Journals, vol. 21(3), pages 335-360.
    12. Parantap Basu, 2014. "Quantitative Easing in an Endogenous Growth Model," CEGAP Working Papers 2014_01, Durham University Business School.
    13. Basu, Parantap, 2001. "Reserve Ratio, Seigniorage and Growth," Journal of Macroeconomics, Elsevier, vol. 23(3), pages 397-416, July.


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