Inflation and growth: New evidence from a dynamic panel threshold analysis

Arbeitspapier

We introduce a dynamic panel threshold model to shed new light on the impact of inflation on long-term economic growth. The empirical analysis is based on a large panel-data set including 124 countries during the period from 1950 to 2004. For industrialized countries, our results confirm the inflation targets of about 2% set by many central banks. For non-industrialized countries, we estimate that inflation hampers growth if it exceeds 17%. Below this threshold, however, the impact of inflation on growth remains insignificant. Therefore, our results do not support growth-enhancing effects of inflation in developing countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB 649 Discussion Paper ; No. 2009,036

Classification and Topics

• Classification: Wirtschaft ; Price Level; Inflation; Deflation ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Economic Growth and Aggregate Productivity: General
• Subject: Inflation thresholds ; inflation and growth ; dynamic panel threshold model ; Inflation ; Inflationsrate ; Wirtschaftswachstum ; Panel ; Schätzung ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kremer, Stephanie ; Bick, Alexander ; Nautz, Dieter
• Event: Veröffentlichung
• (who): Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
• (where): Berlin
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/39331
• Last update: 10.03.2025, 11:43 AM CET