Inflation and Output Volatility: Evidence from International Historical Data

Bruno Ćorić

CESifo Economic Studies, 2020, vol. 66, issue 2, 157-180

Abstract: This study adopts a historical perspective to investigate variations in output volatility within and across world economies. The analysis uses annual data for 37 OECD and non-OECD countries covering the last two centuries. We focus on the relationship between inflation and output volatility. The results of a panel analysis show a positive effect of inflation on output volatility. This finding is consistent with the view that low inflation has a stabilizing effect on output volatility over the long term.

Keywords: business cycle; economic disasters; inflation (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 N10 (search for similar items in EconPapers)
Date: 2020
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