Inflation, Inflation Uncertainty and Macroeconomic Performance in Australia

Ramprasad Bhar () and Girijasankar Mallik ()
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Ramprasad Bhar: School of Banking and Finance, The University of New South Wales, Sydney, 2052, Australia
Girijasankar Mallik: School of Economics & Finance, University of Western Sydney, Locked Bag 1797, Penrith South D. C., 1797, Australia

Economic Analysis and Policy, 2012, vol. 42, issue 3, 305-318

Abstract: Using quarterly data this study finds that inflation uncertainty have negative and significant effects on inflation and output growth at least after the inflation targeting. We also find that output uncertainty has negative and significant effect on inflation. The study uses a newly constructed oil price dummy variable as a control variable and finds that oil price changes significantly increase the inflation uncertainty. These findings are robust and the Generalised Impulse Response Functions corroborate the conclusions. These results have important implications for inflation targeting (IT) monetary policy, and the aim of stabilisation policy in general.

Keywords: EGARCH; Inflation; Growth; Inflation Uncertainty; Output Uncertainty; Impulse Response (search for similar items in EconPapers)
JEL-codes: E31 E52 E63 E64 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:42:y:2012:i:3:p:305-318

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