A Study on Nonlinear Relationship between Inflation and Economic Growth in Iran A Markov Switching Approach
Volume 12, Issue 47, Winter 2013, Pages 51-70
Hossein Tavakolian, Asghar Shahmoradi
Abstract In the mainstream economic view, in low levels of inflation there is a positive relationship between inflation and economic growth, and this relationship changes to a negative one at high levels of inflation. This study examines the probability of occurring these two regimes, using Markov Switching Approach (MSA). The results show that there has been a positive relationship between inflation and economic growth only in 3 periods (1989-93 and two other short periods, 2002-03 and 2006), while in most of the time, inflation in Iran negatively affected the economic growth. The average duration of high inflation periods has been about 4 years, while the average duration of low inflation periods has been about 2 years.
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Volume 10, Issue 39, Winter 2011, Pages 299-327
Asghar Shahmoradi, Seyed Ali Naseri
Abstract