Inflation Thresholds and Growth

Inflation Thresholds and Growth Article

Yilmazkuday, H. (2013). Inflation Thresholds and Growth . International Economic Journal, 27(1), 1-10. 10.1080/10168737.2012.658831

This paper investigates inflation thresholds that lead to higher growth rates using five-year averages of standard variables for 84 countries from 1965 to 2004. The historical experience has important policy implications for developing countries: (i) the catch-up effect has worked only when inflation is below 12%; (ii) the positive effect of human capital on growth has been present and significant when inflation has been below 15%; (iii) financial development has been effective only when inflation has been below 10%; (iv) government size has negatively affected growth when inflation has been below 10%; (v) trade has positively affected growth when inflation has been below 8%. © 2013 Copyright Korea International Economic Association.