Optimal inflation? -Inflation-tillväxtrelationen omprövad
(2018) NEKH01 20181Department of Economics
- Abstract
- This study reconsiders the consensus regarding low inflation being optimal for economic growth. By studying four industrialized countries over a longer period of time (1870-2016) deflation data is taken into account, something previous research has ignored. The empirical result rejects the two percent inflation target set by many central banks. While the model suggests that optimal inflation for GDP growth is no inflation, but rather some rate of deflation, this result is found to be sensitive to the exclusion of high inflation observations. If these outliers are excluded the model fails to justify a robust relationship regarding inflation and growth. Taking this sensitivity into account, no optimal level of inflation or deflation is found.
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8943650
- author
- Zilling, Jennifer LU
- supervisor
- organization
- course
- NEKH01 20181
- year
- 2018
- type
- M2 - Bachelor Degree
- subject
- keywords
- inflation, deflation, economic growth
- language
- Swedish
- id
- 8943650
- date added to LUP
- 2018-07-05 11:26:30
- date last changed
- 2018-07-05 11:26:30
@misc{8943650, abstract = {{This study reconsiders the consensus regarding low inflation being optimal for economic growth. By studying four industrialized countries over a longer period of time (1870-2016) deflation data is taken into account, something previous research has ignored. The empirical result rejects the two percent inflation target set by many central banks. While the model suggests that optimal inflation for GDP growth is no inflation, but rather some rate of deflation, this result is found to be sensitive to the exclusion of high inflation observations. If these outliers are excluded the model fails to justify a robust relationship regarding inflation and growth. Taking this sensitivity into account, no optimal level of inflation or deflation is found.}}, author = {{Zilling, Jennifer}}, language = {{swe}}, note = {{Student Paper}}, title = {{Optimal inflation? -Inflation-tillväxtrelationen omprövad}}, year = {{2018}}, }