Inflation and growth

Smyth, David J.

doi:10.1016/0164-0704(94)90070-1

Cited by 37 publications

(27 citation statements)

References 6 publications

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“…This magnitude is comparable to other studies relating inflation to output and growth. Smyth (1994), for example, using a different model and period of analysis, finds an effect in the USA in the order of -0.193. Fischer (1993), in his cross-sectional and panel analysis, finds a negative effect as well ( -0.125).7 The 'inflationary surprise' variable (in abbreviated form: A(n, -n: )) has a positive effect on output (0 = 0.528).…”

Section: Resultsmentioning

confidence: 96%

“…Several studies estimate the influence of inflation on productivity growth (Jarrett and Selody, 1982;McTaggart, 1992;Rudebusch and Wilcox, 1994;and Smyth, 1994). Without any allowance for cyclical factors, Rudebusch and Wilcox (1994) find that (in the USA) a one percentage point reduction in inflation is associated with an increase in annual productivity growth of 0.35 percentage points.…”

Section: Individual Country Analysismentioning

confidence: 96%

“…McTaggart (1992) and Smyth (1994) estimate a production function that includes inflation as an argument. Both studies find that inflation has a negative effect on growth, but neither can identify the channels at work.…”

Section: Individual Country Analysismentioning

confidence: 99%

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The effect of inflation on the natural rate of output: experimental evidence

et al. 1997

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We examine the inflation-output relationship in the USA for the period 1955-90. We start by replicating Smyth (1992) and subjecting his estimates to a series of diagnostic tests. The model is shown to satisfy conditions for valid inference (weak exogeneity) and policy analysis (super-exogeneity) (Engle, Hendry and Richard, 1983). These robustness checks allow us to study the out-of-sample consequences of the point estimates for various levels of inflation. One central experimental result is that for inflation rates exceeding 4% the natural rate of output is reduced to such an extent that it contributes to a reduction in the growth rate of real GNP that is below historical trend (3.1% in our sample).

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Section: Resultsmentioning

confidence: 96%

Section: Individual Country Analysismentioning

confidence: 96%

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The effect of inflation on the natural rate of output: experimental evidence

et al. 1997

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“…According to Smyth (1992), there is a negative relationship between inflation and growth: for each one percentage point increase in the USA inflation the annual growth rate is reduced by 0.22%. Further Smyth (1994) showed that in the USA each one percentage point increase in acceleration causing a reduction of 0.16% in growth. For Germany, Smyth (1995) has estimated that a 10% increase in the rate of inflation reduces the rate of growth of total factor productivity by 0.025%.…”

Section: Introductionmentioning

confidence: 99%

“…In this literature, Smyth (1992Smyth ( , 1994Smyth ( , and 1995, De Gregorio (1993), and Barro (1995), the growth rate of the economy is considered as the dependent variable and the inflation rate as the explanatory variable. The empirical results have a clear policy implication: if inflation affects growth negatively, then monetary policy ought to stress price stability based on strong anti-inflationary policies targeting zero inflation.…”

Section: Introductionmentioning

confidence: 99%

Impact of Inflation on Economic Growth in Sri Lanka

Madurapperuma¹

2016

JWER

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Abstract:It is broadly assumed that modest and stable inflation rate stimulates economic growth of a country. Modest inflation encourages savers, enhances investment and therefore speed ups economic growth of the country. The aim of this study is to examine the impact of inflation on economic growth in Sri Lanka for the period of 1988 -2015 using the framework of Johansen cointegration test and Error Correction model. The results show that there is a long run negative and significant relationship between economic growth and inflation in Sri Lanka. These results support with the model of utility functions in consumption and real money balances, as exposed by Fischer (1979); De Gregorio (19930;Bruno & Easterly (1998) and disagree with the findings of Sidrauski"s (1967) super neutrality of money in the long run. The results are more likely to support the utility functions in real money balances and consumption.

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On the long run effect of public capital on aggregate output: Estimation and sensitivity analysis

Batina

2000

Advances in Public Economics

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Inflation and growth

Cited by 37 publications

References 6 publications

The effect of inflation on the natural rate of output: experimental evidence

The effect of inflation on the natural rate of output: experimental evidence

Impact of Inflation on Economic Growth in Sri Lanka

On the long run effect of public capital on aggregate output: Estimation and sensitivity analysis

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