EconPapers    
Economics at your fingertips  
 

Output and inflation in the long run

Neil Ericsson (), John Irons and Ralph W. Tryon

No 687, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

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. Typically, output and inflation are positively related in these cointegrating relationships: a price markup model helps interpret this surprising feature.

Keywords: Inflation (Finance); Economic development (search for similar items in EconPapers)
Date: 2000
New Economics Papers: this item is included in nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27) Track citations by RSS feed

Downloads: (external link)
http://www.federalreserve.gov/pubs/ifdp/2000/687/default.htm (text/html)
http://www.federalreserve.gov/pubs/ifdp/2000/687/ifdp687.pdf (application/pdf)

Related works:
Journal Article: Output and inflation in the long run (2001) 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:fip:fedgif:687

Access Statistics for this paper

More papers in International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2021-11-24
Handle: RePEc:fip:fedgif:687