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Title:Inflation and growth: New evidence from a dynamic panel threshold analysis PDF Logo
Authors:Kremer, Stephanie
Bick, Alexander
Nautz, Dieter
Issue Date:2009
Series/Report no.:SFB 649 discussion paper 2009,036
Abstract: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.
Subjects:Inflation thresholds
inflation and growth
dynamic panel threshold model
JEL:E31
C23
O40
Document Type:Working Paper
Appears in Collections:SFB 649 Discussion Papers, HU Berlin

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