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Inflationens påverkan på långsiktig ekonomisk tillväxt, En paneldata studie med Europeiska Unionens medlemsländer

Stenholtz, Alice Kristina LU (2025) NEKH03 20251
Department of Economics
Abstract (Swedish)
This paper examines the connection between inflation and long-term economic growth in the European Union by using a panel data analysis over the period 1983-2023. The study is built on earlier research which indicates that inflation may have a negative impact on economic growth but especially at higher levels. Relying on both exogenous and endogenous growth theories, this study also highlights the importance of stable institutions and predictable inflation for investment driven growth.By using a four-years averages and a random effects panel regression model, the results support that inflation has a statistically significant negative impact on economic growth in EU-countries. By including a squared inflation term in the regression model, a... (More)
This paper examines the connection between inflation and long-term economic growth in the European Union by using a panel data analysis over the period 1983-2023. The study is built on earlier research which indicates that inflation may have a negative impact on economic growth but especially at higher levels. Relying on both exogenous and endogenous growth theories, this study also highlights the importance of stable institutions and predictable inflation for investment driven growth.By using a four-years averages and a random effects panel regression model, the results support that inflation has a statistically significant negative impact on economic growth in EU-countries. By including a squared inflation term in the regression model, a nonlinear relationship could be revealed. The negative impact of inflation weakens at higher levels while the almost overall effect remains negative. However a small positive effect appears in non-Eastern European countries, while the effect remains negative in the East European countries.These findings are partly aligned with prior research highlighting the growth-reducing effects on inflation. The study also points out the role of strong institutional frameworks and inflation related uncertainty. The analysis shows that even with partly strong institutional frameworks in the EU-countries, inflation can have a damaging effect on long-term economic growth. (Less)
Please use this url to cite or link to this publication:
author
Stenholtz, Alice Kristina LU
supervisor
organization
course
NEKH03 20251
year
type
M2 - Bachelor Degree
subject
keywords
inflation, ekonomisk tillväxt, paneldata, Europeiska unionen
language
Swedish
id
9199635
date added to LUP
2025-09-12 09:20:43
date last changed
2025-09-12 09:20:43
@misc{9199635,
  abstract     = {{This paper examines the connection between inflation and long-term economic growth in the European Union by using a panel data analysis over the period 1983-2023. The study is built on earlier research which indicates that inflation may have a negative impact on economic growth but especially at higher levels. Relying on both exogenous and endogenous growth theories, this study also highlights the importance of stable institutions and predictable inflation for investment driven growth.By using a four-years averages and a random effects panel regression model, the results support that inflation has a statistically significant negative impact on economic growth in EU-countries. By including a squared inflation term in the regression model, a nonlinear relationship could be revealed. The negative impact of inflation weakens at higher levels while the almost overall effect remains negative. However a small positive effect appears in non-Eastern European countries, while the effect remains negative in the East European countries.These findings are partly aligned with prior research highlighting the growth-reducing effects on inflation. The study also points out the role of strong institutional frameworks and inflation related uncertainty. The analysis shows that even with partly strong institutional frameworks in the EU-countries, inflation can have a damaging effect on long-term economic growth.}},
  author       = {{Stenholtz, Alice Kristina}},
  language     = {{swe}},
  note         = {{Student Paper}},
  title        = {{Inflationens påverkan på långsiktig ekonomisk tillväxt, En paneldata studie med Europeiska Unionens medlemsländer}},
  year         = {{2025}},
}