NON-LINEAR RELATIONSHIP BETWEEN INFLATION AND ECONOMIC GROWTH IN INDIA
Umar Musa Kallah
This study examine the relationship between economic growth and inflation, various empirical studies have been reviewed, a robust theoretical framework is build base on the monetarist Augmented – Expectation Philips Curve, data of inflation and GDP is source from world bank data base, Perron (1997) and Zivot and Andrew (1992) Unit root test with break is used, the variables shows evidence of stationarity with the presence of break in both level and slope. A Self-exiting Threshold Autoregressive (TAR) model with 3 regime is used; the evidence is for a longrun positive relationship between inflation and economic growth with a threshold value of 1.32, 5.45 and 5.44 for first, second and third regime. Therefore the conclusion reach is that the 5.45 inflation value will translate to economic growth
KEYWORDS: Inflation, Economic Growth, Threshold Autoregressive (TAR) Model, Augmented - Expected Philphs Curve, Threshold Inflation
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Vol | : | 6 |
Issue | : | 7 |
Month | : | July |
Year | : | 2018 |