Threshold Effects in the Relationship Between Inflation and Growth

Abdelhak S Senhadji and Mohsin Khan ()

No 00/110, IMF Working Papers from International Monetary Fund

Abstract: This paper reexamines 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 7–11 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.

Keywords: Inflation; Growth, Threshold Effects, inflation rates, inflation rate, effect of inflation, terms of trade (search for similar items in EconPapers)
Date: 2000-06-01
References: Add references at CitEc
Citations View citations in EconPapers (38) Track citations by RSS feed

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=3646 (application/pdf)

Related works:
Journal Article: Threshold Effects in the Relationship Between Inflation and Growth (2001)
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:imf:imfwpa:00/110

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Series data maintained by Jim Beardow ().