A note on excess money growth and inflation dynamics: evidence from threshold regression

Saumitra, Bhaduri and Raja, Sethudurai (2012): A note on excess money growth and inflation dynamics: evidence from threshold regression.

Abstract

We test the effect of excess money growth on inflation using Threshold Regression technique developed by Hansen (2000). The empirical test is conducted using annual data from India for the period from 1953-54 to 2007-08. The results clearly exhibits that the relationship is not linear and without a strong credit growth, excess money growth has lesser inflationary effects.

• Item Type: MPRA Paper
• Language: English
• Keywords: Excess Money Growth, Quantity Theory of Money, Inflation and Threshold Regression
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers

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