Inflation variability and the relationship between inflation and growth

Raghbendra Jha and Tu Dang

ASARC Working Papers from The Australian National University, Australia South Asia Research Centre

Abstract: We examine the effect of inflation variability and economic growth using annual historical data on both developing and developed countries. The data cover 182 developing countries and 31 developed countries for the period 1961-2009. Proxying inflation variability by the five-year coefficient of variation of inflation, we obtain the following results: (1) For developing countries, there is significant evidence to suggest that when the rate of inflation exceeds 10 percent inflation variability has a negative effect on economic growth. (2) For developed countries, there is no significant evidence that inflation variability is detrimental to growth.

Keywords: Inflation; Growth; Threshold; Variablity (search for similar items in EconPapers)
JEL-codes: C51 E31 E58 O40 (search for similar items in EconPapers)
Pages: 19
Date: 2011
New Economics Papers: this item is included in nep-cba, nep-fdg and nep-mac
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Inflation variability and the relationship between inflation and growth (2012)
Working Paper: Inflation variability and the relationship between inflation and growth (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pas:asarcc:2011-08

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