Non-Decreasing Economic Growth Rate Of Inflation (Ndegri) In Light Of Empirical Studies

Bednarczyk Jan L. () and Brzozowska-Rup Katarzyna ()
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Bednarczyk Jan L.: Kazimierz Pulaski University of Technology and Humanities in Radom, Radom, Poland
Brzozowska-Rup Katarzyna: Kielce University of Technology, Kielce, Poland

Econometrics. Advances in Applied Data Analysis, 2019, vol. 23, issue 1, 9-18

Abstract: The article presents the results of estimating economic growth depending on the inflation levels in selected countries. The results were obtained by means of regression splines, in particular, cubic splines and a B-spline curve. The method applied helps to identify both the area of Non-Decreasing Economic Growth Rate of Inflation and inflation for which the rate of growth reaches its maximum. The calculations and graphic presentations demonstrate that maximum rates of economic growth were reached in inflation ranges of 5%-15% for Poland and 3%-16% for the G-20 countries studied. The data analysis leads to the conclusion that central bank margins for their accommodative monetary policies in the studied countries can be wider than it is implied by the doctrinal bases of the inflation targeting policy or its more restrictive version – strict inflation targeting.

Keywords: low inflation trap; central bank’s inflation target; regression splines (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 E63 E65 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:eaiada:v:23:y:2019:i:1:p:9-18:n:1

DOI: 10.15611/eada.2019.1.01

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