The Negative Inflation-Growth Effect: Theory and Evidence

Mark Harris (), Max Gillman () and Laszlo Matyas

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: The paper presents a monetary model of endogenous growth and specifies an econometric model consistent with it. The economic model suggests a negative inflation-growth effect, and one that is stronger at lower levels of inflation. Empirical evaluation of the model is based on a large panel of OECD and APEC member countries over the years 1961-1997. The hypothesized negative inflation effect is found comprehensively for the OECD countries to be significant and, as in the theory, to increase marginally as the inflation rate falls. For APEC countries, the results from using instrumental variables also show significant evidence of a similar behavior.

Date: 2001-11
View list of references

Downloads: (external link)
http://melbourneinstitute.com/wp/wp2001n12.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:iae:iaewps:wp2001n12

Access Statistics for this paper

More papers in Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne
Address: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
Contact information at EDIRC.
Series data maintained by Woei T Liew ().