Inflation and Openness: A Study of Selected Developing Economies
This paper attempts to examine the influence of openness on the rate of inflation using panel data fro fifteen countries for the years 1980 to 2000. Growth rate of money supply and growth rate of agricultural GDP are the other explanatory variables.Differences in the results between different dichotomies of country groupings have been analysed. The dichotomies are: small and large countries; low income and high-income countries; South Asian and other countries; and hyperinflation and non-hyperinflation countries. Fixed effects and random effects estimates of the models have been compared. The empirical results of the paper show that openness measured by the trade-to-GDP ratio seems to have an inverse relationship with domestic inflation. The interesting finding of the paper is that whereas import-to-GDP ratio has a negative impact on inflation, corroborating the results in the earlier empirical literature, export-to-GDP ratio has a positive impact, variable not generally considered in the literature. Also we discern that the impact of the two on inflation rate is non-linear. The impact of openness on inflation is found to be differing between the different country groupings of our overall panel. The results of the paper indicate that traditional closed economy perspective for the explanation of inflation may not be adequate.
Openness Inflation Macroeconomics Panel models
Dr.Sunil Ashra
Associate Professor and Chairperson,Department of Economics, Management Development Institute,Gursaon 122001, NDIA
国际会议
第六届管理学国际会议(Proceedings of ICM2007 the 6th International on Management)
武汉
英文
1623-1645
2007-08-03（万方平台首次上网日期，不代表论文的发表时间）