Inflation and Economic Growth Link – Multi-Country Scenario
This paper inspects the intercommunication between inflation and economic growth for ten (10) selected countries using annual data series collected from World Bank Development Indicator. GDP and CPI data are used in this regard. Series are found to be stationary at level 1. Residual and Johansen C...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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EconJournals
2020-07-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://econjournals.com/index.php/ijefi/article/view/9942 |
| _version_ | 1797908070034046976 |
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| author | Monir Ahmmed Md. Nezum Uddin Md. Rafiqul Islam Rafiq Mohammed Jashim Uddin |
| author_facet | Monir Ahmmed Md. Nezum Uddin Md. Rafiqul Islam Rafiq Mohammed Jashim Uddin |
| author_sort | Monir Ahmmed |
| collection | DOAJ |
| description |
This paper inspects the intercommunication between inflation and economic growth for ten (10) selected countries using annual data series collected from World Bank Development Indicator. GDP and CPI data are used in this regard. Series are found to be stationary at level 1. Residual and Johansen Cointegration tests confirm the long-run relationship between variables. Short-run dynamics are checked by the Error Correction Model. Desired negative signs are contained in the ECT for all sequences, and absolute values are less than 1. Except for the UK data, the inflation imbalance will be adjusted by economic growth for all countries and vice versa. The ECT of India is observed to be high-0,736 and-0862, suggesting that 73% and 86% of imbalances would converge in long-term equilibrium owing to shifts in inflation and economic growth, respectively. The sensitivity of inflation to growth and vice versa varies from country to country. The study also shows that the association between inflation and economic growth is favorable for some countries and the opposite for other countries. Such outcomes lead policymakers to enact policies to regulate the economy in the context of macroeconomic management.
Keywords: Multi-countries, Consumer Price Index, Economic growth rate, Cointegration, Error Correction Model.
JEL Classifications: E20, E31, E32, O5, O40, O47
DOI: https://doi.org/10.32479/ijefi.9942
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| first_indexed | 2024-04-10T10:48:06Z |
| format | Article |
| id | doaj.art-c9085739b4454ccdb9720ef97c67e78e |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T10:48:06Z |
| publishDate | 2020-07-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-c9085739b4454ccdb9720ef97c67e78e2023-02-15T16:20:15ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382020-07-011044626Inflation and Economic Growth Link – Multi-Country ScenarioMonir AhmmedMd. Nezum Uddin0Md. Rafiqul Islam RafiqMohammed Jashim UddinMd. Nezum Uddin Assistant Professor Department of Economics & Banking International Islamic University Chittagong (IIUC) This paper inspects the intercommunication between inflation and economic growth for ten (10) selected countries using annual data series collected from World Bank Development Indicator. GDP and CPI data are used in this regard. Series are found to be stationary at level 1. Residual and Johansen Cointegration tests confirm the long-run relationship between variables. Short-run dynamics are checked by the Error Correction Model. Desired negative signs are contained in the ECT for all sequences, and absolute values are less than 1. Except for the UK data, the inflation imbalance will be adjusted by economic growth for all countries and vice versa. The ECT of India is observed to be high-0,736 and-0862, suggesting that 73% and 86% of imbalances would converge in long-term equilibrium owing to shifts in inflation and economic growth, respectively. The sensitivity of inflation to growth and vice versa varies from country to country. The study also shows that the association between inflation and economic growth is favorable for some countries and the opposite for other countries. Such outcomes lead policymakers to enact policies to regulate the economy in the context of macroeconomic management. Keywords: Multi-countries, Consumer Price Index, Economic growth rate, Cointegration, Error Correction Model. JEL Classifications: E20, E31, E32, O5, O40, O47 DOI: https://doi.org/10.32479/ijefi.9942 https://econjournals.com/index.php/ijefi/article/view/9942 |
| spellingShingle | Monir Ahmmed Md. Nezum Uddin Md. Rafiqul Islam Rafiq Mohammed Jashim Uddin Inflation and Economic Growth Link – Multi-Country Scenario International Journal of Economics and Financial Issues |
| title | Inflation and Economic Growth Link – Multi-Country Scenario |
| title_full | Inflation and Economic Growth Link – Multi-Country Scenario |
| title_fullStr | Inflation and Economic Growth Link – Multi-Country Scenario |
| title_full_unstemmed | Inflation and Economic Growth Link – Multi-Country Scenario |
| title_short | Inflation and Economic Growth Link – Multi-Country Scenario |
| title_sort | inflation and economic growth link multi country scenario |
| url | https://econjournals.com/index.php/ijefi/article/view/9942 |
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