Economic growth and Inflation: A panel data analysis
Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
One of the most important objectives for any countries is to sustain high economic growth. Even though there are main factors that affect economic growth, the concern of this paper is only about inflation. The relationship between economic growth and inflation is debatable. The first objective of this study is to investigate the relationship between inflation and economic growth. This study uses panel data which includes 13 SSA countries from 1969 to 2009. To analyze the data the model is formed by taking economic growth as dependent variable and four variables (i.e. inflation, investment, population and initial GDP) as independent variables. The result indicates that there is a negative relationship between economic growth and inflation. This study is also examined the causality relationship between economic growth and inflation by using panel Granger causality test. Panel granger causality test shows that inflation can be used in order to predict growth for all countries in the sample, while the opposite it is only true for Congo, Dep. Rep and Zimbabwe.
Place, publisher, year, edition, pages
2012. , 44 p.
economic growth, inflation, panel data, fixed effects, panel Granger causality test
IdentifiersURN: urn:nbn:se:sh:diva-17463OAI: oai:DiVA.org:sh-17463DiVA: diva2:576024
Subject / course
UppsokSocial and Behavioural Science, Law
Lin, Xiang, Högskolelektor
Blomskog, Stig, Högskolelektor