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Inflation and growth: Some theory and evidence

Gillman, Max, Harris, Mark N. and Matyas, Laszlo 2001. Inflation and growth: Some theory and evidence. [Working Paper]. CEU Economics Department working papers, vol. 1/2001. Budapest: Central European University. Economics Department.

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The paper presents a monetary model of endogenous growth and specifies an econometric model consistent with this model. The estimation is based on OECD and APEC panel data, from 1961-1997. It includes fixed country and time heterogeneity and shows a strong negative effect of inflation on growth for the OECD countries, one that decreases marginally as the inflation rate rises. The APEC results show some evidence of the inflation rate effect, with a significant negative impact at higher inflation ranges. Segmenting the sample by country, according to average inflation rates, results in a stronger effect of inflation in general than without such a grouping. It also shows the non- linearity of a stronger marginal negative effect at lower inflation rates both for OECD and for APEC.

Item Type: Monograph (Working Paper)
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HB Economic Theory
Uncontrolled Keywords: Endogenous Growth; Panel Data; Inflation; Non-linearity
Publisher: Central European University. Economics Department
Last Modified: 19 Mar 2016 23:14

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