Stylized Facts and Stylized Illusions: Inflation and Productivity Revisited

Cameron, Norman E.; Hum, Derek

doi:10.2307/136156

Cited by 50 publications

(37 citation statements)

References 19 publications

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“…Using annual data for the period 1951-1991 for Germany and 1955-1990 for USA respectively, suggested that there is not any causal relationship between productivity and inflation in both examined countries [14] . Resulted in the same conclusion in their research in Australia and New Zealand and also, [15] in their research for USA, United Kingdom, Canada, West Germany.…”

Section: Theoretical and Empirical Approachessupporting

confidence: 70%

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A Causal Relationship between Inflation and Productivity: An Empirical Approach for Romania

Dritsakis¹

2004

American J. of Applied Sciences

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Abstract:This study attempts to analyze the relationship between the productivity and the inflation of a transition country of the European Union as Romania. For this purpose we use quarterly data since 1990: IV in 2003: I and the causality analysis, which is based on an error correction model. The results of the empirical analysis showed that there is a causal relationship between inflation and productivity in the Romanian economy.

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Section: Theoretical and Empirical Approachessupporting

confidence: 70%

“…The other critique argues the statistical point that productivity growth and inflation have different orders of integration [15,16,19,20] . These studies claim inflation is non-stationary while productivity growth is stationary and therefore there cannot be a long run relationship.…”

Section: Theoretical and Empirical Approachesmentioning

confidence: 99%

A Causal Relationship between Inflation and Productivity: An Empirical Approach for Romania

Dritsakis¹

2004

American J. of Applied Sciences

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“…Further, their causality test results imply that there is bi-directional causality between inflation and productivity for five countries while one-way causality exists for two countries. Christopoulos and Tsionas's (2005) application of panel cointegration techniques to 1 In addition to those discussed elsewhere in this paper the list includes: Geary (1976), Denny and May (1977), Gordon (1984Gordon ( , 1988, Buck and Fitzroy (1988), Crafts (1992), De Gregorio (1992, Sbordone and Kuttner (1994), Smyth (1995), Cameron et al (1996), Feijo (1997, Palokangas (1997), Hondroyiannis and Papapetrou (1998), Freeman and Yerger (2000), Blanchard and Katz (1999), Fountas et al (1999), Ghali (1999), Tsionas (2003b), Dritsakis (2004), L'horty and Rault (2004), Hsu (2005), Mahadevan and AsafuAdjaye (2006) and Bildirici and Alp (2008).…”

Section: Inflation and Productivitymentioning

confidence: 99%

Real wages, inflation and labour productivity in Australia

2011

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This paper presents an analysis of real wages, inflation and labour productivity interrelationships using cointegration, Granger-causality and, most importantly, structural change tests. Applications of tests to Australian data over the period corroborate the presence of a structural break in 1985 and show that a 1 percent increase in manufacturing sector real wages led to an increase in manufacturing sector productivity of between 0.5 and 0.8 percent. Comparable estimates for the effect of inflation on manufacturing sector productivity have limited statistical significance. Granger causality test results suggest that real wages and inflation both Granger-cause productivity in the long run.

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“…The results of existing research have been mixed and studies can be categorized as making one of four possible predictions, based on their findings. The first of these is that inflation has no effect on economic growth (e.g., Dorrance [14], Sidrauski [34], Cameron, Hum, and Simpson [10]). The second is that there is positive relationship between inflation and economic growth (e.g., Tobin [37], Shi [33], Mallik and Chowdhury [28]).…”

Section: Introductionmentioning

confidence: 99%

Inflation and economic growth: A dynamic panel threshold analysis for Asian economies

Vinayagathasan

2013

Journal of Asian Economics

115

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This paper investigates the existence of a threshold level for inflation and how any such level affects the growth of Asian economies. We used dynamic panel threshold growth regression, which allowed us to work with fixed effect and endogeneity issues. We observed a nonlinear relationship between inflation and economic growth for 32 Asian countries over the period 1980-2009. We detected an inflation threshold of approximately 5.43%, at a 1% level of significance. We found that inflation hurts growth when it exceeds 5.43% but has no effect below this level. Different estimation methods determined that the effect of inflation on growth is robust. Our findings may be useful to central banks as a guide for inflation targeting.

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Stylized Facts and Stylized Illusions: Inflation and Productivity Revisited

Cited by 50 publications

References 19 publications

A Causal Relationship between Inflation and Productivity: An Empirical Approach for Romania

A Causal Relationship between Inflation and Productivity: An Empirical Approach for Romania

Real wages, inflation and labour productivity in Australia

Inflation and economic growth: A dynamic panel threshold analysis for Asian economies

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