Growth-Inflation nexus in USA: A Threshold Regression Approach
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Type
Article
Date
2017-03
Journal Title
Anweshan - journal of Department of Commerce
Journal Editor
Mitra, Debabrata
Journal ISSN
Volume Title
Publisher
University of North Bengal
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Bhowmik, D., Biswas, D., & Mitra, D. (2017). Growth-Inflation nexus in USA: A Threshold Regression Approach. Anweshan - Journal of Department of Commerce, 5(1), 34–52. https://ir.nbu.ac.in/handle/123456789/2960
Authors
Bhowmik, Debesh
Biswas, Debasish
Mitra, Debabrata
Advisor
Editor
Abstract
The paper endeavors to find out the nature of inflation of USA during 1961-2015 and to find out the nexus between inflation and growth using Granger causality, Johansen co-integration and vector error correction models. It also showed threshold limit of inflation of 1.75-3.0 per cent in USA using GDP deflator as inflation and taking World Bank Data. It finds one structural break at 1992 and no random walk with drift. Growth inflation nexus is negative. They are co-integrated and showed unidirectional causality. Error correction process is very fast and significant but vector error correction model is stable but divergent. Federal Reserve Bank is in favour of fiscal and monetary policy reforms to curb inflation.
Description
Keywords
Inflation, Economic growth, Granger Causality, Vector Error Correction, Threshold, Monetary policy
Citation
Accession No
Call No
Book Title
Edition
Volume
ISBN No
Volume Number
5
Issue Number
1
ISSN No
2321-0370
eISSN No
Pages
Pages
34 - 52