Politics, Inflation, and the Mundell-Tobin Effect

Jeffrey Edwards

Journal of Economic Insight, 2006, vol. 32, issue 2, 9-30

Abstract: This paper addresses the possibility of a correlation between inflation and investment for countries with inflation below 20%. The existing literature typically finds no correlation below this level of inflation. By instrumenting with an extensive set of political stability and regime variables, I have shown that within a lower range of inflation rates, between 5% and 9%, this correlation is positive, highly significant, and shows no signs of reverse causality.

JEL-codes: E0 E5 (search for similar items in EconPapers)
Date: 2006
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Working Paper: Politics, Inflation, and the Mundell-Tobin Effect (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:mve:journl:v:32:y:2006:i:2:p:9-30

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