Inflation and economic growth: A dynamic panel threshold analysis for Asian economies

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• 作者：Thanabalasingam Vinayagathasan ; ^{phd10205@grips.ac.jp} ; ^{vinayagamkili@yahoo.com}
• 关键词：C23 ; O40 ; E31
• 刊名：Journal of Asian Economics
• 出版年：2013
• 出版时间：June, 2013
• 年：2013
• 卷：26
• 期：Complete
• 页码：31-41
• 全文大小：506 K

文摘

This paper investigates the existence of a threshold level for inflation and how any such level affects the growth of Asian economies. We use a dynamic panel threshold growth regression, which allows for fixed effects and endogeneity. We observe a nonlinear relationship between inflation and economic growth for 32 Asian countries over the period 1980-2009. We detect an inflation threshold of approximately 5.43 % , at a 1 % level of significance. We find that inflation hurts growth when it exceeds 5.43 % but has no effect below this level. Different estimation methods determine that the effect of inflation on growth is robust. Our findings may be useful to central banks as a guide for inflation targeting.