Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307831 
Year of Publication: 
2021
Citation: 
[Journal:] Economic Review: Journal of Economics and Business [ISSN:] 2303-680X [Volume:] 19 [Issue:] 1 [Year:] 2021 [Pages:] 3-12
Publisher: 
University of Tuzla, Faculty of Economics, Tuzla
Abstract: 
The joint hypothesis test is a replicable interpretation of the quantity theory of money (QTM) when used as an inflation theory. This study examined the effect of money supply and gross domestic product (GDP) growth on inflation volatility. We used the cross- country data of 40 countries, both in 2002 and 2014, from the World Bank publications. We analyzed the data using both the unrestricted regression model and joint hypothesis testing (the Wald test). The unrestricted regression results pointed inflation volatility in 40 countries was mostly driven by the monetary side, not by the real sector. Meanwhile, the joint hypothesis test demonstrated Strong Wald and Weak Wald test for the QTM prediction were rejected. These findings implied undesirable results from a monetarist perspective. We proposed an alternative method to confirm the joint hypothesis test from the QTM. It would be interesting to see whether our findings hold in other countries.
Subjects: 
quantity theory of money
joint hypothesis
inflation
money supply
GDPgrowth
JEL: 
C1
E5
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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