The Connection Between Political Stability and Inflation: Insights from Four South Asian Nations

Ummya Salma and Md. Fazlul Huq Khan

Papers from arXiv.org

Abstract: This study explores the relationship between political stability and inflation in four South Asian countries, employing panel data spanning from 2001 to 2021. To analyze this relationship, the study utilizes the dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) methods, which account for cross-sectional dependence and slope homogeneity in panel data analysis. The findings consistently reveal that increased political stability is associated with lower inflation, while reduced political stability is linked to higher inflation.

Date: 2023-10
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