• Economics
  • Published 2009

The Simultaneous Evolution of Growth and Inflation

  title={The Simultaneous Evolution of Growth and Inflation},
  author={Chih-Chuan Yeh},
We estimate the causal interrelationships between inflation and economic growth within a simultaneous equations framework and obtain identification using a novel heteroskedasticity based method. This implies that conventional empirical studies that analyze the causal relationships between inflation and growth separately suffer from endogeneity bias. After removal of the simultaneous bias, we find that inflation and growth are significant interrelated. Using cross sectional data of 140 countries… CONTINUE READING