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Monetary policy, banking, and growth

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  • Joseph H. Haslag

Abstract

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Joseph H. Haslag, 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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    Cited by:

    1. 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.
    2. Rangan Gupta, 2005. "Financial Liberalization and Inflationary Dynamics," Working papers 2005-31, University of Connecticut, Department of Economics.
    3. Max Gillman & Michal Kejak, 2005. "Contrasting Models of the Effect of Inflation on Growth," Journal of Economic Surveys, Wiley Blackwell, vol. 19(1), pages 113-136, February.
    4. Gupta, Rangan, 2008. "Tax evasion and financial repression," Journal of Economics and Business, Elsevier, vol. 60(6), pages 517-535.
    5. Ariyanto, Anto, 2017. "CRITICAL REVIEW : Inflasi dan Pertumbuhan Jangka Panjang : Sebuah Teori Baru Keynesian dan Bukti semiparametrik Lanjut," INA-Rxiv 5ydqg, Center for Open Science.
    6. Fernandez, Esther, 2005. "Distorting taxes and interest on reserves," Economic Modelling, Elsevier, vol. 22(6), pages 975-1000, December.
    7. Slavtcheva, Dessislava, 2015. "Financial development, exchange rate regimes and productivity growth: Theory and evidence," Journal of Macroeconomics, Elsevier, vol. 44(C), pages 109-123.
    8. Rangan Gupta & Emmanuel Ziramba, 2008. "Costly Tax Enforcement and Financial Repression," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 37(2), pages 141-154, July.
    9. Robert Amano & Tom Carter & Kevin Moran, 2012. "Inflation and Growth: A New Keynesian Perspective," CIRANO Working Papers 2012s-20, CIRANO.
    10. Brian O'Reilly, 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. ASAOKA Shintaro, 2020. "Reserve Requirements and Bubbles," Discussion papers 20042, Research Institute of Economy, Trade and Industry (RIETI).
    12. Rangan Gupta, 2007. "Financial Liberalization and Inflationary Dynamics: An Open Economy Analysis," International Economic Journal, Taylor & Francis Journals, vol. 21(3), pages 335-360.
    13. Parantap Basu, 2014. "Quantitative Easing in an Endogenous Growth Model," CEGAP Working Papers 2014_01, Durham University Business School.
    14. 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.
    15. Jason E. Taylor & Jinill Kim, 2004. "The Pre‐ and Postwar Price‐Output Paradox Revisited," Southern Economic Journal, John Wiley & Sons, vol. 71(1), pages 163-169, July.
    16. Basu, Parantap, 2001. "Reserve Ratio, Seigniorage and Growth," Journal of Macroeconomics, Elsevier, vol. 23(3), pages 397-416, July.
    17. Shouyong Shi & Mariana Rojas Breu & Aleksander Berentsen, 2009. "Liquidity and Growth," 2009 Meeting Papers 590, Society for Economic Dynamics.
    18. Edgar A. Ghossoub, 2015. "Inflation Thresholds and the Efficiency of the Banking Sector," Working Papers 0159eco, College of Business, University of Texas at San Antonio.
    19. 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.
    20. Ghossoub, Edgar A., 2023. "Economic growth, inflation, and banking sector competition," Economic Modelling, Elsevier, vol. 129(C).

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