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Inter-relationship between Economic Growth, Savings and Inflation in Asia

Author

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  • Chaturvedi Vaibhav
  • Brajesh Kumar
  • Dholakia, Ravindra H.

Abstract

The present study examines the inter- relationship between economic growth, saving rate and inflation for south-east and south Asia in a simultaneous equation framework using two stage least squares with panel data. The relationship between saving rate and growth has been found to be bi-directional and positive. Inflation has a highly significant negative effect on growth but positive effect on saving rate. Inflation is not affected by growth but is largely determined by its past values, and saving rate is not affected by interest rate. These findings for countries in Asia with widely divergent values of aggregates are very relevant for development policies and strategies.

Suggested Citation

  • Chaturvedi Vaibhav & Brajesh Kumar & Dholakia, Ravindra H., 2008. "Inter-relationship between Economic Growth, Savings and Inflation in Asia," IIMA Working Papers WP2008-07-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    • Handle: RePEc:iim:iimawp:wp02106
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    File URL: https://www.iima.ac.in/sites/default/files/rnpfiles/2008-07-01Dholakia.pdf
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    References listed on IDEAS

    as
    1. David E. BLOOM & Jocelyn E. FINLAY, 2009. "Demographic Change and Economic Growth in Asia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 4(1), pages 45-64, June.
    2. David E. Bloom & David Canning & Pia N. Malaney, 1999. "Demographic Change and Economic Growth in Asia," CID Working Papers 15, Center for International Development at Harvard University.
    3. Aghevli, Bijan B, 1977. "Inflationary Finance and Growth," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1295-1307, December.
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    Cited by:

    1. Bert Van Roosebeke & Ryan Defina, 2022. "How Inflation Impacts Deposit Insurance: Real Coverage and Coverage Ratio," IADI Policy Briefs 6, International Association of Deposit Insurers.

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