A Study on Nonlinear Relationship between Inflation and Economic Growth in Iran A Markov Switching Approach
In the mainstream economic view, in low levels of inflation there is a positive relationship between inflation and economic growth, and this relationship changes to a negative one at high levels of inflation. This study examines the probability of occurring these two regimes, using Markov Switching...
| Main Authors: | , |
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| Format: | Article |
| Language: | fas |
| Published: |
Allameh Tabataba'i University Press
2012-12-01
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| Series: | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| Subjects: | |
| Online Access: | https://joer.atu.ac.ir/article_930_9ff1d699f203e9160ef10f0544d49481.pdf |
| Summary: | In the mainstream economic view, in low levels of inflation there is a positive relationship between inflation and economic growth, and this relationship changes to a negative one at high levels of inflation. This study examines the probability of occurring these two regimes, using Markov Switching Approach (MSA). The results show that there has been a positive relationship between inflation and economic growth only in 3 periods (1989-93 and two other short periods, 2002-03 and 2006), while in most of the time, inflation in Iran negatively affected the economic growth. The average duration of high inflation periods has been about 4 years, while the average duration of low inflation periods has been about 2 years. |
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| ISSN: | 1735-210X 2476-6453 |