Relationship between inflation and economic growth in Azerbaijani economy: is there any threshold effect?

Fakhri Hasanov ()

MPRA Paper from University Library of Munich, Germany

Abstract: The study examines possibility of threshold effect of inflation on economic growth over the period of 2000-2009. Estimated threshold model indicates that there is a non-linear relationship between economic growth and inflation in the Azerbaijani economy and threshold level of inflation for GDP growth is 13 percent. Below threshold level inflation has statistically significant positive effect on GDP growth, but this positive relationship becomes negative one when inflation exceeds 13 percent. Results of the study may be useful for monetary policymakers in terms of keeping inflation below the threshold level of 13 percent to prevent its negative effect on economic growth.

Keywords: Azerbaijani Economy; Inflation; Economic Growth; Gross Fixed Capital Formation; Threshold Level (search for similar items in EconPapers)
JEL-codes: C51 E31 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-cis and nep-fdg
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Citations: View citations in EconPapers (14)

Published in Asian Journal of Business and Management Sciences No1.1(2011): pp. 1-11

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:33494

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