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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
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