International Evidence on the Long-Run Impact of Inflation

David E Rapach

Journal of Money, Credit and Banking, 2003, vol. 35, issue 1, 23-48

Abstract: In this paper, I use a structural vector autoregression framework to analyze the effects of a permanent change in inflation on the long-run real interest rate and real output level in 14 industrialized countries. Long-run monetary superneutrality is rejected for all 14 countries using annual data: the results indicate that a permanent increase in inflation lowers the long-run real interest rate in each country; a permanent increase in inflation also increases the long-run real output level in a number of countries. Long-run monetary superneutrality is also rejected for four out of the five countries examined using quarterly data.

Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:35:y:2003:i:1:p:23-48

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