The Impact of Inflation on Economic Growth

Kryeziu, Nexhat; Durguti, Esat

doi:10.20525/ijfbs.v8i1.297

Cited by 41 publications

(41 citation statements)

References 10 publications

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“…As regards to the inflation rate, the conclusions in our examination claim that this ratio does not have an important influence on the economic growth rate. Our results are inversely related to the study conducted by the authors (Kryeziu & Durguti, 2019). In their observed paper "The Impact of Inflation on Economic Growth -for Eurozone countries".…”

Section: Resultssupporting

confidence: 56%

“…According, to these consequences we refuse the insignificant hypothesis and the alternative hypothesis remains accepted due to the fact the value of P = value is larger than zero P> 10. The results of this analysis are identical, if compared with the study conducted by (Kryeziu & Durguti, 2019), within the study of the impact of inflation on economic growth -evidence for Eurozone countries as well as the period 1997-2017, even within the Eurozone countries, the inflation rate consumes one important influence on economic development.…”

Section: Data Analysis and Resultssupporting

confidence: 52%

“…The other determinant that is considered important enough to have an impact on economic growth is the inflation rate. The authors Kryeziu and Durguti, (2019) in their study "The impact of inflation on economic growth -for eurozone countries" investigated the inflation rate and its impact on economic growth using panel data for the period 1997-2017. The econometric results obtained of this analysis through multiple regression toward the mean show that the inflation rate contains a important positive impact on economic process.…”

Section: Literature Reviewmentioning

confidence: 99%

See 2 more Smart Citations

Determinants Affecting Economic Growth – Evidence for Western Balkans Countries

Durguti¹,

Gashi²,

Kunoviku³

et al. 2020

IJFBS

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The purpose of this paper is to find out if selected determinants have any effect on the economic growth rate using the strong balanced panel data for the Western Balkan countries for the period 2001-2017, and the data used are on an annual basis, which in total there are 102 observation periods. For the realization of the paper, secondary data and an advanced dynamic approach were used, such as pooled OLS methods, fixed and random effects model, to test economic growth rate as dependent variable, and explanatory variables such as working remittances to GDP, exports to GDP, imports to GDP, foreign direct investment to GDP and inflation rate. From the generated outputs, it is true to say that working remittances to GDP, exports to GDP, and imports to GDP have an effect that influences economic growth, respectively GDP growth. Even though foreign direct investment to GDP and inflation rate does not have a significant effect on economic growth, respectively GDP growth. Keywords: Economic growth; macroeconomic determinants; panel data. JEL code: O47, O11, C23

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Section: Resultssupporting

confidence: 56%

Section: Data Analysis and Resultssupporting

confidence: 52%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Determinants Affecting Economic Growth – Evidence for Western Balkans Countries

Durguti¹,

Gashi²,

Kunoviku³

et al. 2020

IJFBS

Self Cite

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show abstract

“…In their findings, to introduce non-linearity to the model, they use narrow money to scale budget deficit. According to (Kryeziu and Durguti, 2019), there is a positive impact of budget deficit on the rate of inflation in the Eurozone Countries, but the relationship is not statistically significant. Another study by Hamburger and Zwick (1981); Grossman (1982) found that the inflation rate and budget deficit have a significant link between them in the US; conversely, the findings by McMillin and Beard (1982), which examined the situation of USA, show that there is no evidence to support that there is a relationship between money growth and inflation.…”

Section: Correlationsmentioning

confidence: 96%

“…On the other hand (Catao and Terrones,2005) researched developed and developing countries and concluded that budget deficit and inflation have a positive relationship in developing countries, but in developed countries, there is no such relationship. Based on (Kryeziu and Durguti, 2019) conducted research across 17 Eurozone states from 1997 to 2017. They found out that the unemployment rate and fiscal rate shows that there is no direct impact on the inflation rate.…”

Section: Literature Reviewmentioning

confidence: 99%

How Does the Budget Deficit Affect Inflation Rate – Evidence from Western Balkans Countries

Durguti¹

2020

IJFBS

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The main purpose of this study is to investigate if determinants that we selected in our analysis have any effects on inflation rate in Western Balkans Countries[1] by using panel data for the period of 2001-2017, in yearly basis in total of 102 observation. The study used quantitative analysis approach and secondary data by applying the multivariate time series, respectively vector error correction model [VECM]. Multivariate time series was applied to investigate whether the budget deficit and other explanatory variable have any significant impact on inflation rate. The results from our analysis shows that three of four determinates that we used are significant on inflation rate. The model summaries statistics for inflation rate which shows that inflation rate has a moderate correlation with explanatory variables that we used in our model, that explanatory variables explain 45.5 percent of dependent variable and we can conclude that a model is a proper and fit. The results suggest that one percent point increase in budget deficit to GDP ratio is associated with about a 9.34 percent point increase in inflation rate. The overall inference is that the ratios that we selected has a significant influence on the inflation rate in Western Balkans Countries. [1] Western Balkans Countries: Albania, Bosnia & Hercegovina, Kosovo, Montenegro, North Macedonia and Serbia.

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Threshold effects in the relationship between inflation and economic growth: Further empirical evidence from the developed and developing world

Azam

Khan

2020

Int. J Fin Econ

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We re‐evaluate empirically the threshold effect of inflation on economic growth for 27 countries (16 developing and 11 developed economies) over 1975–2018. Our research differs from the previous one in that it employs non‐average inflation data with a balanced panel for a longer period of time. The methods of fixed effects and feasible generalized least squares (FGLS) are used to estimate the inflation threshold and its effects on growth. The empirical estimates show a significant negative association between inflation and growth above the threshold level of inflation. The empirical estimate indicates that inflation impede growth when inflation exceeds the turning point 12.23% and 5.36% in Panel‐1 and Panel‐2, respectively, and with the greatest negative effects in Panel‐2. In addition, our findings provide evidence that gross fixed capital formation, government spending, household spending and real exports stimulate economic growth while the growth rate of the population is detrimental to the growth of the regions. Overall, the empirical result of this study could be of use in providing policy direction to governments and management authorities. In developing and developed economies, the management authorities need to cogitate a maximum rate of 12.3% and 5.4%, respectively, as an inflation target to avoid the detrimental effects of high inflation on economic growth for sustaining macroeconomic stability.

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The Impact of Inflation on Economic Growth

Cited by 41 publications

References 10 publications

Determinants Affecting Economic Growth – Evidence for Western Balkans Countries

Determinants Affecting Economic Growth – Evidence for Western Balkans Countries

How Does the Budget Deficit Affect Inflation Rate – Evidence from Western Balkans Countries

Threshold effects in the relationship between inflation and economic growth: Further empirical evidence from the developed and developing world

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