Investigating the relationship between inflation and economic growth in Mauritania: an empirical analysis using the regime change model

Amal Ben Abdallah (), Sourour Guidara (), Rima Aloulou (), Maha Kalai () and Helali Kamel
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Amal Ben Abdallah: University of Sfax
Sourour Guidara: University of Sfax
Rima Aloulou: University of Sfax
Maha Kalai: University of Sfax

SN Business & Economics, 2024, vol. 4, issue 1, 1-25

Abstract: Abstract This study examines the non-linear relationship between inflation and economic growth in Mauritania using the threshold regression model. The analysis covers the period from 1970 to 2018, allowing for a comprehensive assessment of the inflation–growth dynamics in the country. By employing the regime change model, we aim to identify the existence of a threshold level of inflation beyond which the relationship with economic growth changes. This approach allows us to capture potential asymmetries and non-linearities in the relationship, providing valuable insights for policymakers. In line with several previous research works, our findings indicated that there is a non-linear relationship between the consumer price index and the economic growth. This relationship was influenced by macroeconomics features. In addition, the results show a positive impact of inflation on economic growth below the threshold of 5.53%, while, above this threshold, the relationship becomes negative.

Keywords: Inflation; Economic growth; Threshold regression; Developing country (search for similar items in EconPapers)
JEL-codes: E23 E29 E31 E44 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s43546-023-00599-x

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