Threshold Effects in the Relationship Between Inflation and Growth
Mohsin S. Khan,Abdelhak S Senhadji +1 more
- Vol. 48, Iss: 1, pp 1-21
TLDR
In this article, the authors re-examine the existence of threshold effects in the relationship between inflation and growth, using new econometric techniques that provide appropriate procedures for estimation and inference.Abstract:
This paper re-examines the issue of the existence of threshold effects in the relationship between inflation and growth, using new econometric techniques that provide appropriate procedures for estimation and inference. The threshold level of inflation above which inflation significantly slows growth is estimated at 1-3 percent for industrial countries and 11-12 percent for developing countries. The negative and significant relationship between inflation and growth, for inflation rates above the threshold level, is quite robust with respect to the estimation method, perturbations in the location of the threshold level, the exclusion of high-inflation observations, data frequency, and alternative specifications.read more
Citations
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Journal ArticleDOI
Inflation and growth: new evidence from a dynamic panel threshold analysis
TL;DR: This paper introduced a dynamic panel threshold model to estimate inflation thresholds for long-term economic growth, which allows the estimation of threshold effects with panel data even in case of endogenous regressors.
Journal ArticleDOI
Fiscal Deficits and Growth in Developing Countries.
Christopher Adam,David Bevan +1 more
TL;DR: This paper examined the relation between fiscal deficits and growth for a panel of 45 developing countries, and found evidence of a threshold effect at a level of the deficit around 1.5% of GDP.
Journal ArticleDOI
Inflation Thresholds and the Finance-Growth Nexus
Peter L. Rousseau,Paul Wachtel +1 more
TL;DR: In this article, the authors examined whether the strength of the cross-sectional relationship between the size of a country's financial sector and its rate of economic growth varies with the inflation rate.
Journal ArticleDOI
Fiscal policy, expenditure composition, and growth in low-income countries
TL;DR: The authors assesses the effects of fiscal consolidation and expenditure composition on economic growth in a sample of 39 low-income countries during the 1990s and finds that strong budgetary positions are generally associated with higher economic growth.
Posted Content
The Long-Run Behavior of Commodity Prices: Small Trends and Big Variability
Paul Cashin,C. John McDermott +1 more
TL;DR: This article analyzed the behavior of real commodity prices over the period 1862-99 and found that the amplitude of price movements increased in the early 1900s, while the frequency of large price movement increased after the collapse of the Bretton Woods regime of fixed exchange rates.
References
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