EconPapers    
Economics at your fingertips  
 

Output and Inflation in the Long Run

Neil Ericsson (), John S. Irons () and Ralph W. Tryon ()
Additional contact information
John S. Irons: Amherst College
Ralph W. Tryon: Federal Reserve Board

No 2000.01, Amherst Economic Papers from Amherst College, Department of Economics

Abstract: Cross-country regressions explaining output growth often obtain a negative effect from inflation. However, that result is not robust, due to the selection of countries in sample, temporal aggregation, and omission of consequential variables in levels. This paper demonstrates some implications of these mis-specifications, both analytically and empirically. In particular, for most G-7 countries, annual time series of inflation and the log-level of output are cointegrated, thus rejecting the existence of a long-run relation between output growth and inflation. Output and inflation are positively related in these cointegrating relationships: a price markup model helps interpret this surprising feature.

Keywords: cointegration; cross-country regression; economic growth; inflation; long run; output (search for similar items in EconPapers)
JEL-codes: F43 E3 (search for similar items in EconPapers)
Date: 2000-10-24, Revised 2000-10-24
References: Add references at CitEc
Citations View citations in EconPapers (9) Track citations by RSS feed

Forthcoming, Journal of Applied Econometrics

Downloads: (external link)
http://www.amherst.edu/~jsirons/RePEc/aep/acewpa/archive/acep2000-01.pdf
None

Related works:
Journal Article: Output and inflation in the long run (2001) Downloads
Working Paper: Output and inflation in the long run (2000) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aep:acewpa:2000.01

Access Statistics for this paper

More papers in Amherst Economic Papers from Amherst College, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Daniel Barbezat ().

 
Page updated 2018-08-25
Handle: RePEc:aep:acewpa:2000.01