Cyclical and Causal Patterns of Inflation and GDP Growth
Mahmood Arai (),
Mats Kinnwall () and
Peter Skogman Thoursie ()
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Mats Kinnwall: Handelsbanken Markets, Postal: Handelsbanken Markets, Stockholm
No 2002:5, Research Papers in Economics from Stockholm University, Department of Economics
Empirical foundations for the view that high inflation impairs GDP growth are
examined using annual data for 115 countries over the period 1960-1995.
Taking into account country heterogeneity and time-specific symmetric shocks,
as well as endogeneity of inflation and dynamics of GDP growth we estimate
dynamic panel-data models of the effects of inflation on growth. We find no
evidence supporting the view that inflation is in general harmful to GDP
growth. On the other hand, there is a negative correlation between
contemporaneous intra-country inflation and growth for periods characterised
by positive oil-price shocks.
Keywords: GDP GROWTH; Inflation (search for similar items in EconPapers)
JEL-codes: O11 O57 (search for similar items in EconPapers)
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Journal Article: Cyclical and causal patterns of inflation and GDP growth (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:sunrpe:2002_0005
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