期刊名称：International Journal of Economics and Empirical Research (IJEER)
印刷版ISSN：2311-3871
电子版ISSN：2310-5232
出版年度：2016
卷号：4
期号：1
页码：32-45
出版社：The Economics and Social Development Organization (TESDO)
摘要：Purpose: This study aims to assess the nonlinearity in inflation-growth nexus for BRIMC economies. It also proposes a threshold level beyond which inflation becomes detrimental to growth.Methodology: Data for the period of 1970–2013 has been used to scrutinize the said nexus via dynamic panel cointegration techniques of: PMG, MG and DFE. Hausman test has been employed to choose comparatively efficient and consistent estimator among the above estimators. Findings: Our findings reveal that the relationship between economic growth and inflation within the linear frame work is significantly positive in the long run, but when we introduce a square term of inflation this relationship becomes negative though it still remains statistically significant. This sign switching behavior of inflation from positive to negative confirms the existence of non-linear relationship between inflation and economic growth in BRIMC economies. Therefore we have found out the threshold level of inflation for BRIMC economies which is based on a fixed-effect panel threshold model proposed by Hansen (1999). Our results show that inflation can hamper the growth of BRIMC economies if it exceeds the threshold level of 8.32%. Recommendations: However, below this threshold, inflation is beneficial for the long run economic growth.
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