IMF Staff Papers, Volume 48, No. 1

November 8, 2001

Preview Citation

Format: Chicago

Robert P Flood. IMF Staff Papers, Volume 48, No. 1, (USA: International Monetary Fund, 2001) accessed September 18, 2024

Summary

This paper re-examines the issue of the existence of threshold effects in the relationship between inflation and growth, using new econometric techniques that provide appropriate procedures for estimation and inference. The threshold level of inflation above which inflation significantly slows growth is estimated at 1-3 percent for industrial countries and 11-12 percent for developing countries. The negative and significant relationship between inflation and growth, for inflation rates above the threshold level, is quite robust with respect to the estimation method, perturbations in the location of the threshold level, the exclusion of high-inflation observations, data frequency, and alternative specifications.

Subject: Bank credit, Banking, Financial institutions, Foreign exchange, Inflation, Loans, Money, Prices, Tariffs, Taxes

Keywords: Africa, Asia and Pacific, Bank credit, Central and Eastern Europe, Eastern Europe, ERBS literature, ERBS syndrome, Inflation, Loans, SP, Sub-Saharan Africa, Tariffs, TFP growth, Threshold estimate, Trade liberalization

Publication Details

Pages:

232
Volume:

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DOI:

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Issue:

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Series:

IMF Staff Papers No. 2001/003
Stock No:

SPIEA0012001
ISBN:

9781451974614
ISSN:

1020-7635

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