Inflation and Productivity: Empirical Evidence from Europe

Mike Tsionas

Review of International Economics, 2003, vol. 11, issue 1, 114-129

Abstract: The paper investigates the empirical association between inflation and productivity in 15 European countries over the period 1960–97. Modern econometric techniques based on integration and cointegra– tion analysis are used to test for the existence of a long–run relationship between inflation and productivity. Recently developed causality tests for possibly cointegrated VAR models are also applied instead of relying on standard Granger causality tests which are inappropriate in the presence of nonstationary variables.

Date: 2003
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