|
| |
| Ricardo R. Moreira |
| |
| ''Inflation and real exchange rate and macroeconomic gaps: causality for 50 emerging and developing countries'' |
| ( 2019, Vol. 39 No.1 ) |
| |
| |
| This article presents and tests two opposing hypotheses regarding the causality relationships between the inflation rate (as well as the real exchange rate) and macroeconomic gaps, especially the investment-domestic savings gap. For empirical purposes, the Dumitrescu and Hurlin (2012) method for Granger causality in panel data was applied to annual series from 1995 to 2014, covering a group of 50 emerging and developing countries. Furthermore, we also applied different methods for Dynamic Panel Data, specifically Difference and System GMM regressions. The empirical findings indicated a complementarity of both theoretical perspectives to explain the aforementioned relations, although these results are more robust for the conventional hypothesis. |
| |
| |
| Keywords: GDP; Domestic absorption; Investment; Domestic savings; Inflation; Real Exchange; Panel Data |
JEL: E1 - General Aggregative Models: General
E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General |
| |
| Manuscript Received : Jun 22 2017 | | Manuscript Accepted : Jan 13 2019 |
|
