Home Articles List Article Information
Iranian Economic Review
Journal Archive
Volume Volume 22 (2018)
Volume Volume 21 (2017)
Volume Volume 20 (2016)
Volume Volume 19 (2015)
Issue Issue 3
Autumn 2015, Page 251-393
Issue Issue 2
Spring 2015, Page 123-250
Issue Issue 1
Winter 2015
Volume Volume 18 (2014)
Volume Volume 17 (2013)
Volume Volume 16 (2012)
Volume Volume 15 (2010-2011)
Volume Volume 14 (2009)
Volume Volume 13 (2008)
Volume Volume 12 (2007)
Volume Volume 11 (2006)
Volume Volume 10 (2005)
Volume Volume 9 (2004)
Volume Volume 8 (2003)
Volume Volume 7 (2002)
Volume Volume 6 (2002)
Volume Volume 5 (2001)
Volume Volume 4 (2000)
Volume Volume 3 (1998)
Volume Volume 2 (1996)
Volume Volume 1 (1994)
Singh, S., Singh, A. (2015). Causal Nexus between Inflation and Economic Growth of Japan. Iranian Economic Review, 19(3), 265-278. doi: 10.22059/ier.2015.56846
Shailender Singh; Amar Singh. "Causal Nexus between Inflation and Economic Growth of Japan". Iranian Economic Review, 19, 3, 2015, 265-278. doi: 10.22059/ier.2015.56846
Singh, S., Singh, A. (2015). 'Causal Nexus between Inflation and Economic Growth of Japan', Iranian Economic Review, 19(3), pp. 265-278. doi: 10.22059/ier.2015.56846
Singh, S., Singh, A. Causal Nexus between Inflation and Economic Growth of Japan. Iranian Economic Review, 2015; 19(3): 265-278. doi: 10.22059/ier.2015.56846

Causal Nexus between Inflation and Economic Growth of Japan

Article 2, Volume 19, Issue 3, Autumn 2015, Page 265-278  XML PDF (296 K)
Document Type: Research Paper
DOI: 10.22059/ier.2015.56846
Authors
Shailender Singh 1; Amar Singh2
1Associate Professor, Department of International Finance, I-Shou University, Taiwan
2Assistant Professor, Department of Commerce, GraphicEra Hill University, Uttarakhand, India
Abstract
This study aims to evaluate the link between economic growth and consumer price index (CPI) in Japan for the period of 1980-2014. Initial series were adjusted for stationarity using the Augmented Dickey- Fuller (ADF) test for unit root followed by the application of Johansen Co-integration Test in order to examine the long-run relationship among the variables, while the causalities were evaluated using Granger Causality model. The empirical results reveal that economic growth and CPI are co-integrated and thus exhibit a long-run relationship between the variables. The Granger causality test supports bi-directional causality between economic growth and CPI in Japan. The paper adopts a time series framework of the Vector Error Correlation Models (VECM) to study the dynamic relationship between economic growth and consumer price index for Japan.  
Keywords
Co-integration; Consumer Price Index; Economic Growth; Granger causality test; Inflation; Vector error correction
References
  1. Ahmed, S. (2010). An Empirical Study on Inflation and Economic Growth in Bangladesh. International Journal of Sustainable Development, 2(3), 41-48.
  2. Ayyoub, M., Chaudhry, I. and Farooq, F. (2011). Does Inflation Affect Economic Growth? The case of Pakistan. Pakistan Journal of Social Sciences, 31(1), 51-64.
  3. Barro, R.J. (1995). Inflation and Economic Growth, NBER Working Paper 5326, Cambridge.
  4. Berber, M. and Artan, S. (2004). Enflasyon ve Ekonomik Büyüme İlişkisi: Türkiye Örneği.Turkey Economic Association, 2004/21.
  5. Bruno, M. and Easterly, W. (1998). Inflation Crisis and Long-Run Growth. Journal of Monetary Economics, 41(1).
  6. 6.    Bruno, M., and Easterly, W. (1995). Inflation Crises and Long-Run Growth. World Bank Policy Research Working Paper No.1517.
  7. Chari, V.V., Jones, L.E. and Manuelli, R.E. (1996). Inflation, Growth, and Financial Intermediation, Federal Reserve Bank of St. Louis, May/June Review.
  8. Chaudhry, S., Qamber, Y. and Farooq, F. (2012). Monetary Policy, Inflation and Economic Growth in Pakistan: Exploring the Co-integration and Causality Relationships. Pakistan Journal of Commerce Society Science, 6 (2), 332-347.
  9. Datta, K. and Kumar, C. (2011). Relationship between Inflation and Economic Growth in Malaysia. International Conference on Economics and Finance Research (IPEDR), 4(2), 415-16.
  10. Dickey, D.A. and Fuller, W.A. (1981). Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root. Econometrica, 49, 1057-1072.
  11. Erbaykal, E. and Okuyan, H.A. (2008). Does Inflation Depress Economic Growth? Evidence from Turkey. International Research Journal of Finance and Economics, 17, 1450-2887.
  12. Fischer, S. (1993). The Role of Macro-economic Factors in Growth. Journal of Monetary Economics, 32(3).
  13. Johansen, S. and Juselius, K. (1990). Maximum Likelihood Estimation and Inference on Co-integration with the Application to the Demand for Money. Oxford Bulletin of Economics and Statistics, 52,169-210.
  14. Kearney, P.S.C. and Chowdhury, K. (1997). Inflation and Economic Growth: A Multi-country Empirical Analysis. Applied Economics, 29, 1387-1301.
  15. Madhukar, S. and Nagarjuna, B. (2011). Inflation and Growth Rates in India and China: A Perspective of Transition Economies. International Conference on Economics and Finance Research. 4, (97), 489-490.
  16. Mallik, G. and Chowdhury, A. (2001). Inflation and Economic Growth: Evidence from Four South Asian Countries. Asia-Pacific Development Journal, 8 (1), 123-135.
  17. Omoke, C. (2010). Inflation and Economic Growth in Nigeria. Journal of Sustainable Development, 3(2).
  18. Ophanides, A. and Solow, R. (1990). Money Inflation and Growth, Handbook of Monetary Economics, 1(4).
  19. Pesaran, M.H., Shin, Y. and Smith, R.J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics, 16, 289-326.
  20. Prasanna, S. and Gopakumar, K. (2010). An Empirical Analysis of Inflation and Economic Growth in India. International Journal of Sustainable Development, 15(2), 46-59.
  21. Saaed, A. (2007). Inflation and Economic Growth in Kuwait: 1985-2005 Evidence from Co-integration and Error Correction Model, Applied Econometrics and International Development, 7(1).
  22. Tan, Eu Chye (2008). Inflation and Economic Growth in ASEAN-5, Japan and South Korea. In: 11th InternationalConvention of the East Asian Economic Association, 15-16 November, Manila.
  23. Tobin, J. (1965). Money and Economic Growth. Econometrica, 33, 671-684.
  24. Wai, U.T. (1995). The Relation between Inflation and Economic Development: A Statistical Inductive Study. IMF Staff Papers, 7, 302-317.
Statistics
Article View: 2,124
PDF Download: 1,583