An Analysis of the Relationship Between Inflation and Economic Growth PDF Download
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Author: Carroll Edward Dunn (Jr.)
Publisher:
ISBN:
Category :
Languages : en
Pages : 260
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Author: Carroll Edward Dunn (Jr.)
Publisher:
ISBN:
Category :
Languages : en
Pages : 260
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Author: Raymond Cook
Publisher: GRIN Verlag
ISBN: 3656441731
Category : Business & Economics
Languages : en
Pages : 39
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Research Paper (postgraduate) from the year 2011 in the subject Economics - Finance, grade: A, University of Newcastle, language: English, abstract: During the past two decades, China’s economy has been growing rapidly, so has the inflation rate. This research focuses on the relationship between China’s inflation rate and economic growth. There are three sub-questions, consisting of whether there is a significant correlation between China’s inflation and economic growth, whether there is a cause-and-effect relationship between China’s inflation and economic growth, and how time factor influences their relationship. The result will be helpful for the government to find a way in order to achieve high economic growth and low inflation. After reviewing empirical literature, we know that as the dada and methods differ, different researchers have generated different conclusions regarding the relationship between inflation and economic growth. In this research, we use CPI to measure inflation rate and GDP growth rate to measure economic growth rate. All the data are collected from the National Bureau of Statistics of China. We use three methods to analyse data, including the Correlation Coefficient test, the Granger Causality test as well as the VAR model analysis. The result turns out to be that there is a bidirectional causality relationship between inflation and economy growth, but the relationship is not so strong because CPI is not solely driven by GDP. At last, we have come up with three recommendations: firstly, change their model of economic development; secondly, use the monetary policies; thirdly, monitor and predict people’s expectation of inflation.
Author:
Publisher:
ISBN: 9780949887856
Category :
Languages : en
Pages :
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Author: Martin Paldam
Publisher:
ISBN:
Category : Economic development
Languages : en
Pages : 24
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Author: Anna Miller
Publisher: GRIN Verlag
ISBN: 3656523223
Category : Business & Economics
Languages : en
Pages : 48
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Master's Thesis from the year 2013 in the subject Economics - Economic Cycle and Growth, grade: 64%, University of Nottingham, language: English, abstract: This paper examines the inflation-growth interaction for different country groups with similar national incomes for the period 1970-2011. It could be confirmed that this relation is strictly nonlinear with a threshold level of inflation of 3% for high-income countries and 13% for low-income countries. Although this result is in line with previous empirical studies based on a similar data set, much smaller samples needed to be used to obtain these results. Inflation threshold levels are estimated using the iteration method and different panel-specific techniques. Strongly significant thresholds were yielded only when controlling for country-fixed effects. Policymakers can use the findings for high-income or industrialised countries as a guide for inflation targeting, however more precise analyses for less advanced countries are needed in order to be useful for monetary policy.
Author: Satya Paul
Publisher:
ISBN: 9781875760039
Category : Inflation (Finance)
Languages : en
Pages : 25
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Author: Vikesh Gokal
Publisher:
ISBN:
Category : Economic Development
Languages : en
Pages : 58
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Author: Deseke Kebede
Publisher: GRIN Verlag
ISBN: 3668582432
Category : Business & Economics
Languages : en
Pages : 69
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Research Paper (undergraduate) from the year 2017 in the subject Economics - Economic Cycle and Growth, grade: 1, , language: English, abstract: The purpose of the study is to examine the relationship between inflation and economic growth in Ethiopia over the period of 1991/92- 2014/15 by using data at quarter base. The study was employed Johansen method of co-integration and vector error correction model and a technique of conditional least square. The result shows that both in long-run and short-run the relationship between inflation and economic growth is positive. Despite to this, the granger causality test tells us bi- directional causation between these two variables. The result also revealed that threshold level of inflation beyond on which inflation negatively affects economic growth of Ethiopia is 5 percent. Therefore, co-ordination between macro- economic policy makers is vital and should have to raise their hands and put their eyes on measures that keep down inflation below 5 percent to have sustainable economic growth in the country.
Author: Moges Endalamaw Yigermal
Publisher: GRIN Verlag
ISBN: 3668655979
Category : Business & Economics
Languages : en
Pages : 23
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Case Study from the year 2016 in the subject Economics - Monetary theory and policy, , language: English, abstract: Since the main objective of the paper is to test the existence of causality relationship between the three macroeconomic variables, namely real GDP, price level (CPI) and M2 money supply (MS), analysis has been made there by employing 40 years of data (data from 1975-2014). VAR Granger causality test has been made to verify the objective of the paper. The VAR Granger causality test result suggesting the existence of strong and significant correlation between the three variable s pairwise. The direction of causation is found to be a uni- directional causation between money supply and inflation, real GDP and Money supply and between real GDP and inflation and the causation runs from money supply to inflation, real GDP to Money supply and real GDP to inflation respectively. From the causation we observed that money supply has relationship with level of price and economic growth (real GDP). Basically targeting monetary expansion has a multiple role to boost economic growth and control the level of inflation.
Author: Anna Miller
Publisher: GRIN Verlag
ISBN: 3656522677
Category : Business & Economics
Languages : en
Pages : 13
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Essay from the year 2013 in the subject Business economics - Operations Research, grade: 73%, University of Nottingham, language: English, abstract: Up to the 1970s it was mostly observed that inflation does not have a significant effect on growth, or that the effect was even slightly positive (Sarel 1996). However, due to the following decades of high and persistent inflation in many countries1, the available data showed changes in the inflation-growth nexus. It was univocally confirmed that inflation has a negative impact on growth, and macroeconomic policies are aiming to spur growth by keeping inflation at low levels. This having said, intuitively the question arises, how low should the target inflation be? Or, which is the threshold level of inflation between a positive and negative impact on growth? Many authors in the 1990s attempted to solve this question, with fairly divers results. Sarel (1996) analysed a panel of 87 countries over the period 1970 to 1990 using OLS estimation. He finds a structural break at an average annual rate of inflation of 8%. Below this level, inflation has no significant effect on growth, but for inflation levels above 8%, growth is significantly and strongly negatively affected. Gosh and Phillips (1998) find a much lower threshold at 2.5%, and Christoffersen and Doyle (1998), applying Sarel’s methodology on transient countries between 1990-1996, obtain a threshold of 13%. Bruno and Easterly’s (1998) results are somewhat striking. Their analysis is based on a sample of 31 countries that experienced high-inflation episodes over the period 1961-1994, and results in the fact that inflation does not have a significant effect on growth for normal levels, however the relationship becomes negative with high-frequency data and highinflation observations of 40% or higher.Motivated by this variety of results, Khan and Senhadji re-examined this issue in their 2001 paper “Threshold Effects in the Relationship Between Inflation and Growth”. They contribute to existing work by extending and modifying their analysis compared to previous literature by, first, looking separately on developing and industrialized countries, and second, by applying new econometric methods, which include the non-linear least squares (NLLS) estimation combined with a hybrid function of inflation, where the threshold level is found with conditional least squares. Furthermore, Khan and Senhadji (2001) use the bootstrap method, proposed by Hansen (1999), in order to test for statistical significance of the threshold effect. Accordingly, their results differ in so far from previous work as the threshold...
