Threshold Effects in the Relationship between Inflation and Growth

Khan, Mohsin S.; Senhadji, Abdelhak S

doi:10.2139/ssrn.879840

Cited by 97 publications

(113 citation statements)

References 25 publications

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“…The panel model with threshold effects in Hansen (1999) has been widely used in the empirical research. Hansen's fixed effect estimator has been applied to applications on the investment decision of firms under financial constraints, the relation between fiscal deficit and economic growth (Adam and Bevan 2005), inflation and growth (Khan and Ssnhadji 2001) and others. The threshold effect in the model allows for the asymmetric effect of the exogeneous variables depending on whether the threshold variable is above or below the unknown threshold.…”

Section: Introductionmentioning

confidence: 99%

Estimation of dynamic panel threshold model using Stata

2019

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We develop a Stata command xthenreg to implement the first-differenced GMM estimation of the dynamic panel threshold model, which Seo and Shin (2016, Journal of Econometrics 195: 169-186) have proposed. Furthermore, We derive the asymptotic variance formula for a kink constrained GMM estimator of the dynamic threshold model and include an estimation algorithm. We also propose a fast bootstrap algorithm to implement the bootstrap for the linearity test. The use of the command is illustrated through a Monte Carlo simulation and an economic application.

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Section: Introductionmentioning

confidence: 99%

Estimation of dynamic panel threshold model using Stata

2019

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“…Our empirical evidence fits well with papers showing that the effect of finance on growth depends on the economic and institutional environment of a country. For example, Rousseau and Wachtel (2002), Choi, Smith, and Boyd (1996), Haslag and Koo (1999), Khan and Senhadji (2000), and Boyd, Levine and Smith (2001) show that the effect of credit on growth is diminished in high inflation countries. It is, however, not clear what function of the financial system is blocked in high inflation environments.…”

Section: Introductionmentioning

confidence: 99%

The Maturity Structure of Bank Credit: Determinants and Effects on Economic Growth

Valev

Tasic

2008

SSRN Journal

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“…One of the benefits of this approach is that it avoids heteroscedasticity complications. The non-linear effect relationship is examined by adding quadratic terms of financial development, integration, and inclusion to the economic growth model (Sarel, 1996;Khan and Senhadji (2001). The non-linear model for financial development, financial inclusion, financial integration, and economic growth is specified as in Equation (5).…”

Section: The Threshold Effect Using the Glsmentioning

confidence: 99%

Financial Development, Integration, Inclusion, and Economic Growth: Co-Integrating Relationships and Threshold Analysis

Chiwira

2022

EJEF

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This study examines the short and long-run relationships between financial development, integration, inclusion, and economic growth in SADC, as well as the corresponding threshold levels. Covering the period 1995 to 2020, the ARDL technique was used to test for co-integrating relationships, and the GLS was utilized for the determination of the respective threshold levels. The study establishes that bank credit to the private sector negatively affects economic growth in the long run. Most SADC countries were still operating below their respective minimum financial development threshold levels. It is observed that there are no threshold levels for financial integration in SADC, although the result, compared with the threshold levels of financial development seems to suggest that the financial domestic system and some level of economic development are a prerequisite for financial integration decisions. The financial inclusion threshold level for poor SADC countries is low. Yet most of these countries had the highest mobile banking facilities in the region. One possible indication can be that these countries may be operating at financial inclusion levels detrimental to economic growth. Financial development, along with its facets of financial integration and financial inclusion, is found to be the driver of economic growth in SADC. SADC countries, therefore, need to establish a strategic mix of these facets of financial development for the realization of significant economic growth.

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Threshold Effects in the Relationship between Inflation and Growth

Cited by 97 publications

References 25 publications

Estimation of dynamic panel threshold model using Stata

Estimation of dynamic panel threshold model using Stata

The Maturity Structure of Bank Credit: Determinants and Effects on Economic Growth

Financial Development, Integration, Inclusion, and Economic Growth: Co-Integrating Relationships and Threshold Analysis

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