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2020 | OriginalPaper | Chapter

30. Inflation as Reflecting Macroeconomic Gaps: An Analysis for Emerging Economies

Author : Ricardo Ramalhete Moreira

Published in: Advances in Cross-Section Data Methods in Applied Economic Research

Publisher: Springer International Publishing

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Abstract

This article is tested for the hypothesis regarding the causality relationships between a macroeconomic gap, especially the investment–domestic savings’ gap, and the inflation rate. For empirical purposes, Dumitrescu and Hurlin (Econ Modell 29:1450–1460, 2012) method for Granger causality in panel data was applied to the annual series from 1995 to 2014, covering a group of 50 emerging and developing countries. The empirical findings indicated a corroboration of the tested hypothesis, according to which an increase in the macroeconomic gap is accompanied by a rise in inflation rates.

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Footnotes
1
Although all the estimated coefficients have small values, it is important to regard them as a preliminary step. Indeed, our main goal in the present work was to assess causality relations between the studied variables. More robust measures of correlation require multiple regression analysis in panel data, thereby taking into account control variables affecting the behavior of the dependent time series across countries.
 
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Metadata
Title
Inflation as Reflecting Macroeconomic Gaps: An Analysis for Emerging Economies
Author
Ricardo Ramalhete Moreira
Copyright Year
2020
Book
Advances in Cross-Section Data Methods in Applied Economic Research

Print ISBN: 978-3-030-38252-0

Electronic ISBN: 978-3-030-38253-7

Copyright Year: 2020

DOI
https://doi.org/10.1007/978-3-030-38253-7_30

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