A Note on Excess Money Growth and Inflation Dynamics: Evidence from Threshold Regression

Saumitra Bhaduri and S. Raja Sethu Durai ()
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S. Raja Sethu Durai: Pondicherry University

Working Papers from Madras School of Economics,Chennai,India

Abstract: We test the effect of excess money growth on inflation using Threshold Regression technique developed by Hansen (2000). The empirical test is conducted using annual data from India for the period from 1953-54 to 2007-08. The results clearly exhibits that the relationship is not linear and without a strong credit growth, excess money growth has lesser inflationary effects.

Keywords: Excess Money Growth; Quantity Theory of Money; Inflation; Threshold Regression (search for similar items in EconPapers)
JEL-codes: E31 E51 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2013-02
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Citations: View citations in EconPapers (1)

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Working Paper: A note on excess money growth and inflation dynamics: evidence from threshold regression (2012)
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