Inflation and Economic Growth Link – Multi-Country Scenario

Ahmmed, Monir; Uddin, Md. Nezum; Rafiq, Md. Rafiqul Islam; Uddin, Mohammed Jashim

doi:10.32479/ijefi.9942

Cited by 5 publications

(3 citation statements)

References 11 publications

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“…Whereas inflation (INF) illustrates a moderate positive impact on the GDP whereby coefficients (0.005) and p-value (0.0132) suggest that for every 1-unit increase to inflation, GDP increases by 0.005 units. These results are aligned with those (Adaramola & Dada, 2020;Ahmmed et al, 2020;Ramzan, 2021b). Overall, based on the findings from the ARDL model, we conclude that the variables (LNGEXPED, TAXR, UNEMP, and INF) have significant short-term relationships with GDP in Malaysia.…”

Section: Regression Estimation 421 Short-term Relationshipsupporting

confidence: 88%

The Impact of Fiscal Policy on Economic Growth: Fresh Evidence From Malaysia

Haidari,

Junejo

2024

CJMS

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Many scholars have researched the connection between fiscal policy and economic growth and how fiscal policy can be a crucial factor for economic development and growth. Despite this, it still remains a critical debate amongst policymakers and scholars. Thus, this study fills the gap by analyzing the impact of fiscal policy on economic growth in Malaysia spanning 1990 to 2022. The secondary data from World Bank Indicators (WDI) is collected. This study examines the impact of fiscal policy (government expenditure) on Malaysia's economic growth by adding more macro factors such as unemployment, tax revenue, and inflation. This study employs the Autoregressive distributed lag (ARDL) model to examine the long-run correlation to meet this objective. Furthermore, various econometric models are employed, including the ARDL bound test and the error correction model (ECM), to check the relationship between the variables. Based on empirical results and findings, the study suggests that there is a strong relationship between GDP and expenditure, unemployment, tax revenue and inflation since the probability value is less than significant in the short-term relationship with constant and unrestricted constant form. Additionally, with the ARDL Model boundary test, government expenditure, unemployment, tax revenue, and inflation have a long-term relationship with GDP in Malaysia, where the F-statistic value is smaller than the lower boundary. Moreover, the Error correction method with restricted constant suggests a long-term link between the expenditure and GDP. Notwithstanding the results, fiscal policymakers must carefully evaluate the efficacy of government expenditure allocation to ensure that it is consistent with the long-term economic growth goals. The potential limitation of this study is its dependency on secondary data from the World Bank Indicators (WDI), which may not capture all relevant nuances of Malaysian fiscal policy and economic dynamics.

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Section: Regression Estimation 421 Short-term Relationshipsupporting

confidence: 88%

The Impact of Fiscal Policy on Economic Growth: Fresh Evidence From Malaysia

Haidari,

Junejo

2024

CJMS

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“…for life stabilization and multidimensional poverty reduction can be adopted (Nguyen, 2018). Before framing the policies, the policy makers should taken into consideration the higher sensitivity of growth to change in inflation observed in India (Ahmmed et al, 2020). The private sector is currently not in a situation to lead as it itself is seeking support from the government.…”

Section: Middle Class Strategies To Generate Novel Sources Of Income Due To Covid-19 Disruption Of Their Mhi and Budgetmentioning

confidence: 99%

Covid-19 Disruption of Middle-Class Monthly Household Income and Budget

Gupta

Bansal²

2020

IJEFI

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Covid-19 has brought the life of every individual to a standstill. The middle class is in majority in India. The capable members in the family keep earning on monthly basis contributing to the Monthly Household Income (MHI) and keep on managing the activities as per household budget. But, the Covid-19 outbreak disrupted the way the middle class was managing household financial activities before the outbreak. Owing to prolonged lockdown all over the world, many of them have either lost their jobs or are on the verge of losing their jobs. It has really put a big question mark on the life of all the members in the house. Most of them are either paying EMIs of house or education loan, the basic necessities. It is completely dark everywhere. Moreover, shopping list of essentials has been changed. Masks, gloves sanitizers are occupying space above food and education. This is how Covid-19 has disrupted the monthly spending of the household. Cluster Analysis has been applied and two major clusters with "Highly Affected" and "Hardly Affected" households have been identified. No doubt, government and big corporate are coming up in front to support them in the hours of need. How long it will take to bring life back to normalcy-it is still difficult to predict.

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“…Other papers estimate a long-run equilibrium, but do not provide clear evidence regarding the direction of causality. For instance, Raghutla et al ( 2019 ) find a negative long-run relationship between inflation and output growth in India, Kassim and Manap ( 2017 ) in Malaysia, and Gatawa et al ( 2017 ) and Onwubuariri et al ( 2021 ) in Nigeria: also, Ahmmed et al ( 2020 ) detect a positive one in Malaysia, Thailand, Singapore, Japan, and Bangladesh, and a negative one in the US, Pakistan, the UK, and India; finally, Anochiwa and Maduka ( 2015 ) find a nonlinear relationship in Nigeria.…”

Section: Introductionmentioning

confidence: 97%

The relationship between prices and output in the UK and the US

2022

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This paper aims to provide new evidence on the relationship between prices and output in both the US and the UK (which is important to discriminate between different macroeconomic theories) by focusing on the long run. For this purpose, it applies fractional integration and long-range dependence techniques that are more general than the standard modelling approach based on the stationary I (0) versus nonstationary I (1) dichotomy which has been used in previous studies. All series appear to be highly trended and to exhibit high degrees of integration and persistence, especially in the case of CPI. Since the two variables have different degrees of integration in each of the two countries, fractional cointegration tests cannot be carried out. We assume instead weak exogeneity of each of them in turn and test for causality by regressing the other variable against lagged values of the weakly exogenous one. We find that the only significant relationship implies the existence of a lagged effect of prices on output in the case of the US, which suggests a dominant role for demand shocks.

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Inflation and Economic Growth Link – Multi-Country Scenario

Cited by 5 publications

References 11 publications

The Impact of Fiscal Policy on Economic Growth: Fresh Evidence From Malaysia

The Impact of Fiscal Policy on Economic Growth: Fresh Evidence From Malaysia

Covid-19 Disruption of Middle-Class Monthly Household Income and Budget

The relationship between prices and output in the UK and the US

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