Does Inflation Harm Economic Growth
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Does Inflation Harm Economic Growth
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Author : Javier Andrés
language : en
Publisher:
Release Date : 1997
Does Inflation Harm Economic Growth written by Javier Andrés and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with Economic development categories.
The purpose of this paper is to study the correlation among growth and inflation at the OECD level, within the framework of the so-called convergence equations, and to discuss whether this correlation withstands a number of improvements in the empirical models, which try to address the most common criticisms of this evidence. The main findings are the following: 1) the negative correlation among growth and inflation is not explained by the experience of high-inflation economies; 2) the estimated costs of inflation are still significant once country-specific effects are allowed for in the empirical model; and 3) the observed correlation cannot be dismissed on the grounds of reverse causation (from GDP to inflation).
Does Inflation Harm Economic Growth
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Author : Javier Andrés Domingo
language : en
Publisher:
Release Date : 1997
Does Inflation Harm Economic Growth written by Javier Andrés Domingo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with categories.
Nonlinear Effects Of Inflationon Economic Growth
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Author : Mr.Michael Sarel
language : en
Publisher: International Monetary Fund
Release Date : 1995-06-01
Nonlinear Effects Of Inflationon Economic Growth written by Mr.Michael Sarel and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1995-06-01 with Business & Economics categories.
This paper examines the possibility of nonlinear effects of inflation on economic growth. It finds evidence of a significant structural break in the function that relates economic growth to inflation. The break is estimated to occur when the inflation rate is 8 percent. Below that rate, inflation does not have any effect on growth, or it may even have a slightly positive effect. When the inflation rate is above 8 percent, however, the estimated effect of inflation on growth rates is significant, robust and extremely powerful. The paper also demonstrates that when the existence of the structural break is ignored, the estimated effect of inflation on growth is biased by a factor of three.
The Costs And Benefits Of Price Stability
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Author : Martin Feldstein
language : en
Publisher: University of Chicago Press
Release Date : 2007-12-01
The Costs And Benefits Of Price Stability written by Martin Feldstein and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-12-01 with Business & Economics categories.
In recent years, the Federal Reserve and central banks worldwide have enjoyed remarkable success in their battle against inflation. The challenge now confronting the Fed and its counterparts is how to proceed in this newly benign economic environment: Should monetary policy seek to maintain a rate of low-level inflation or eliminate inflation altogether in an effort to attain full price stability? In a seminal article published in 1997, Martin Feldstein developed a framework for calculating the gains in economic welfare that might result from a move from a low level of inflation to full price stability. The present volume extends that analysis, focusing on the likely costs and benefits of achieving price stability not only in the United States, but in Germany, Spain, and the United Kingdom as well. The results show that even small changes in already low inflation rates can have a substantial impact on the economic performance of different countries, and that variations in national tax rules can affect the level of gain from disinflation.
Exports Inflation And Growth
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Author : Thorvaldur Gylfason
language : en
Publisher: International Monetary Fund
Release Date : 1997-09-01
Exports Inflation And Growth written by Thorvaldur Gylfason and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997-09-01 with Business & Economics categories.
This paper identifies some of the main determinants of exports and economic growth in cross-sectional data from the World Bank, covering 160 countries in the period 1985-1994. First, the linkages between the propensity to export and population, per capita income, agriculture, primary exports, and inflation are studied by statistical methods. Then, the relationship between economic growth and some of the above-mentioned determinants of exports and investment are scrutinized the same way. The main conclusion is that, in the period under review, high inflation and an abundance of natural resources tended to be associated with low exports and slow growth.
Inflation Disinflation And Growth
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Author : Mr.Atish R. Ghosh
language : en
Publisher: International Monetary Fund
Release Date : 1998-05-01
Inflation Disinflation And Growth written by Mr.Atish R. Ghosh and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1998-05-01 with Business & Economics categories.
Although few would doubt that very high inflation is bad for growth, there is much less agreement about moderate inflation’s effects. Using panel regressions and a nonlinear specification, this paper finds a statistically and economically significant negative relationship between inflation and growth. This relationship holds at all but the lowest inflation rates and is robust across various samples and specifications. The method of binary recursive trees identifies inflation as one the most important statistical determinants of growth. Finally, while there are short-run growth costs of disinflation, these are only relevant for the most severe disinflations, or when the initial inflation rate is well within the single-digit range.
Inflation Anchoring And Growth Evidence From Sectoral Data
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Author : Sangyup Choi
language : en
Publisher: International Monetary Fund
Release Date : 2018-03-02
Inflation Anchoring And Growth Evidence From Sectoral Data written by Sangyup Choi and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-03-02 with Business & Economics categories.
Central bankers often assert that low inflation and anchoring of inflation expectations are good for economic growth (Bernanke 2007, Plosser 2007). We test this claim using panel data on sectoral growth for 22 manufacturing industries for 36 advanced and emerging market economies over the period 1990-2014. Inflation anchoring in each country is measured as the response of inflation expectations to inflation surprises (Levin et al., 2004). We find that credit constrained industries—those characterized by high external financial dependence and R&D intensity and low asset tangibility—tend to grow faster in countries with well-anchored inflation expectations. The results are robust to controlling for the interaction between these characteristics and a broad set of macroeconomic variables over the sample period, such as financial development, inflation, the size of government, overall economic growth, monetary policy counter-cyclicality and the level of inflation. Importantly, the results suggest that it is inflation anchoring and not the level of inflation per se that has a significant effect on average industry growth. Finally, the results are robust to IV techniques, using as instruments indicators of monetary policy transparency and independence.
Beyond Inflation Targeting
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Author : Gerald A. Epstein
language : en
Publisher: Edward Elgar Publishing
Release Date : 2009
Beyond Inflation Targeting written by Gerald A. Epstein and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with Business & Economics categories.
Inflation targeting (IT) has become the sacred cow of central banking. But its suitability to developing nations remains contested. The contributors to this volume perform the valuable service of sketching out plausible, more development-friendly alternatives. They are to be commended in particular for avoiding a one-size-fits-all approach and paying close attention to the needs of specific countries. Their proposals range from relatively minor tinkering in IT to comprehensive overhaul. A common theme is the central role of the real exchange rate, which the central banks ignore at their economies peril. Dani Rodrik, Harvard University, US As the world economy is devastated by a virulent financial crisis and jobs are lost in scores, central bankers are increasingly questioned as to why they have failed to sustain stability and growth even though they told us all along that conquering inflation would be necessary and sufficient to do so while hoping to get a pat on the back for achieving a degree of price stability unprecedented in recent times. This book provides a lot of food for thought on why. It is a powerful critique of the orthodox obsession with inflation in neglect of the two deepseated problems of the unbridled market economy financial instability and unemployment. It is a must for all policy makers, notably in the developing world, and for the mainstream. Yilmaz Akyuz, formerly of the United Nations Conference on Trade and Development, Geneva, Switzerland This collective volume makes a compelling case for balancing the developmental and stabilization functions of central banks. In particular, the authors emphasize that, as practiced in many successful developing countries, competitive real exchange rates can be good for growth and employment generation, and should thus be a specific focus of central bank actions. The book is a must read for those looking for a more balanced framework for central bank policies. José Antonio Ocampo, Columbia University, US and former Under-Secretary-General of the United Nations for Economic and Social Affairs and Finance Minister of Colombia This book, written by an international team of economists, develops concrete, country specific alternatives to inflation targeting, the dominant policy framework of central bank policy that focuses on keeping inflation in the low single digits to the virtual exclusion of other key goals such as employment creation, poverty reduction and sustainable development. The book includes thematic chapters, including analyses of class attitudes toward inflation and unemployment and the gender impacts of restrictive monetary policy. Other chapters propose improved monetary frameworks for Argentina, Brazil, India, Mexico, the Philippines, South Africa, Turkey, and Vietnam. Policy frameworks that are explored include employment targeting, and targeting a stable and competitive real exchange rate. The authors also show that to reach a larger number of targets, including higher employment and stable inflation, central banks must use a larger number of instruments, including capital management techniques. This volume offers concrete, socially valuable alternatives that economists, policy makers, students and interested laypeople should consider before adopting one size fits all, often inadequate, policies that have become a virtual policy making fad.
The Case For A Long Run Inflation Target Of Four Percent
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Author : Laurence M. Ball
language : en
Publisher: International Monetary Fund
Release Date : 2014-06-09
The Case For A Long Run Inflation Target Of Four Percent written by Laurence M. Ball and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-06-09 with Business & Economics categories.
Many central banks target an inflation rate near two percent. This essay argues that policymakers would do better to target four percent inflation. A four percent target would ease the constraints on monetary policy arising from the zero bound on interest rates, with the result that economic downturns would be less severe. This benefit would come at minimal cost, because four percent inflation does not harm an economy significantly.
Imf Staff Papers
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Author : International Monetary Fund. Research Dept.
language : en
Publisher: International Monetary Fund
Release Date : 1963-01-01
Imf Staff Papers written by International Monetary Fund. Research Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1963-01-01 with Business & Economics categories.
This paper discusses effects of inflation on economic development. A mild inflation may well encourage little, or no, evasion of the “inflation tax.” On the other hand, a strong inflation, and frequently a mild one also, will lead to community reactions which have effects like those of widespread tax evasion. A development policy may have wider aims than the encouragement of a high level of investment. Inflation has two effects on the desire for liquidity, which are related to the two basic reasons why individuals and businesses wish to hold liquid assets—the speculative and precautionary motives. Inflation increases the value of effective liquidity, thereby raising the community's desire for it, but it makes the most generally accepted store of liquidity unacceptable sources of protection. The control of inflation is only one of the problems facing a government wishing to encourage rapid economic development. The fight against illiteracy, the reform of bureaucratic practices, the building of basic sanitary facilities for the eradication of endemic diseases, the substitution of competitive for monopolistic trade practices, the encouragement of a widespread spirit of entrepreneurship, and the creation of an adequate amount of social capital, may be important prerequisites for rapid growth.