Inflation Growth Research Articles

An investigation into the ability of the reverse yield gap to forecast inflation and economic growth in South Africa

Background: Monetary policy in South Africa is carried out by the South African Reserve Bank (SARB) with the aim of keeping inflation within a target range of 3% – 6%. The SARB uses a variety of models to aid them, with the core model being the most significant. Aim: The primary aim of this research is to determine whether the reverse yield gap (RYG) contains information that could be useful to the SARB when making monetary policy decisions. Setting: The authors found no evidence that similar studies on the RYG have previously been done in the South African context. Since the yield curve has been found to be significant in South Africa at forecasting economic growth, yet insignificant in Europe, the results for this research may too be different to the global experience. Methods: The authors tested for linear relationships between the RYG and economic growth and inflation over the period 1960–2014. Results: The results indicate that a slight linear relationship may exist in the case of economic growth, with the RYG based on earnings yields showing better out-of-sample forecasting abilities. Further investigation indicates that the linear relationship is stronger during times of economic upturn. The results for inflation forecasting, however, show no signs of a reasonable linear relationship. Conclusion: There is evidence for the SARB to consider whether the RYG can replace other economic variables in its core model without loss of predictive ability. Interestingly, this study found evidence to suggest that the RYG has an inverse relationship to future economic growth in South Africa, which is not what was expected.

АНАЛІЗ ІНФЛЯЦІЙНИХ ПРОЦЕСІВ В УКРАЇНІ ЗА 2012–2017 РР. ТА ЇХ ВПЛИВ НА ЕКОНОМІЧНЕ ЗРОСТАННЯ

В статті нами було узагальнено попередні дослідження впливу інфляції на економічне зростання у довгострокову та короткостроковому періодах. Проведений аналіз економічної та інфляційної динаміки 2012–2017 рр. Проаналізовано причинно-наслідковий зав’язок між інфляцією та економічним зростанням за аналізований період. Встановлено тісноту та достовірність зв’язку між зазначеними категоріями у 2012–2017 рр.

Institutional quality and the relationship between inflation and economic growth

While a bulk of literature in the last two decades confirms a nonlinear relationship between inflation and output growth, the inflation thresholds above which it reduces output growth remain high for developing countries compared to their developed counterparts. Cukierman et al. (Am Econ Rev 82(3):537–555, 1992) posit that the developing economies observe strong political instability and polarization, which makes inflation tax optimal choice for these countries. This study empirically supports these views by using an innovative threshold model and system GMM approaches for a large panel of 113 economies over the period 1981–2015. Moreover, our results show a minimum level of institutional quality above which the inflation–growth relationship is negative and below it is nonexistent.

PENGARUH LAJU PERTUMBUHAN INFLASI, HARGA MINYAK DUNIA DAN DOW JONES INDUSTRIAL AVERAGE TERHADAP INDEKS HARGA SAHAM GABUNGAN YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2007-2011

This research attempts to influence the inflation growth, the oil price dow jones industrial average to Composite Stock Price Index which is registred in indonesian stock exchange in the period of 2007-2011. The population in this research was the whole index in indonesian stock exchange (ISE). The sample was taken based on sampling purpodive. The data analysis technique used double linier regression. The dependent variable in this research was the growth of Composite Stock Price Index, while the independent variable was the inflation growth, the oil price and dow jones industrial average. The results of this research showed that the almost dependent variable used had effects for the growth of Composite Stock Price Index. The inflation rate growth variable did not have effects on Composite Stock Price Index growth, while the oil price rate variable and dow jones industrial average had effects on Composite Stock Price Index growth. Simultaneously, the independent variables examinedhere had effects on Composite Stock Price Index growth.

Evolução dos Custos Médico-Hospitalares de Planos Privados de Assistência à Saúde no Brasil

Brazil has achieved a national coverage rate of medical private health plans around 24.5% in June of 2017 (47,383,248). However, it has been observed a slowdown tendency of number of customers, comparing Dec / 2012 (50,409,378). This research reports the evolution of costs in Brazilian healthcare private operators (benefits manager, self-management, medical cooperative, philanthropy, health insurance specialist and group medicine) between 2003 and 2016, from the perspective of the average cost variation and of the resource and services utilization rate. The public data were obtained from websites of the Institute of Supplementary Health Studies (IESS), the National Agency of Supplemental Health (ANS) and the Institute of Applied Economic Research (IPEA). In this period, it was found that the growth of medical inflation in Brazil was higher than the general inflation and that resource and service utilization rates remain at high levels (geometric mean of 81.87%). This indicates that there is an increase in the average cost along with the increase in production.

СОВЕРШЕНСТВОВАНИЕ НАЛОГОВОГО АДМИНИСТРИРОВАНИЯ НДС В ИНТЕРЕСАХ ГОСУДАРСТВА И НАЛОГОПЛАТЕЛЬЩИКОВ

Despite the fact that the tax regulation of VAT has been improving since its introduction in Russia, disputes over its further reformation are still ongoing. In this regard, the paper describes an attempt to justify the need of reforming the method of VAT calculation and administration not only in the interests of the state, but also in the interests of the taxpayers, which requires thorough weighting of all the positive and negative consequences of the proposed changes in tax legislation. The analysis of the quality of administration and structure of VAT revenues to the state budget of Russia showed imperfection of the structure of the tax on relation to the value added tax calculated for payment to the budget and the amount of tax deductions. With this structure more than 93% of the VAT amounts are subject to reimbursement from the budget. In such proportions, the administration of VAP is not effective, despite the annual improvement in the quality of tax control. For the solution of the revealed problems, it has been offered to carry out inventory of tax privileges and exemptions on VAT for their further processing in respect to the contents and structure. Representatives of the expert community warn against risky options for raising VAT rates, which will cause fast growth of inflation in Russia and neutralize the activities of the Central Bank of Russia to reduce inflation. The possible variants of complex adjustment of tax rates of VAT and insurance contributions to extra-budgetary funds, which will not only increase the tax revenues of the budget, but also reduce the tax burden on the activities of economic entities, are considered.

ANALISIS PENGARUH INFLASI TERHADAP LAJU PERTUMBUHAN EKONOMI DI KOTA JAMBI

In an economy of a country or region are certainly not apart from a problem that intertwined and mutually influence each other. These conditions always happen in all countries that there is in the world and not apart of this also on the Government of the city of Jambi. The economy of the city of Jambi who still has not shown the consistency of course is still influenced by other factors are interlinked, for instance variable inflation. Inflation is indeed directly does not affect economic growth however indirectly to provide disruption in spur economic growth. On the basis of things that writers do this research. the purpose of this research is; 1) analyzing the rate of growth of inflation and economic growth that occurred in the city of Jambi; 2) analyse the influence of inflation towards economic growth in the city of Jambi; 3) and see the relationship of inflation with economic growth in the city of Jambi. This research was conducted with the use of quantitative and qualitative approaches and utilizing secondary data becomes available. analytical tools used in this research is a simple linear regression and correlation of person who used to see the influence and relationship variables infalsi against economic growth. From the results of the discussion indicates that the inflassi effect negatively to economic growth and inflation have a negative relationship with economic growth. This means that rising inflation effect on the rate of economic growth in the city of Jambi. Keywords: inflation, economic growth

INTERNATIONAL OUTPUT AND INFLATION UNCERTAINTY AND THEIR IMPACT ON COUNTRIES' MACROECONOMIC PERFORMANCE. EVIDENCE FROM A DYNAMIC FACTOR GARCH-IN-MEAN MODEL

We identify international output and inflation uncertainty and analyze their impact on individual countries' macroeconomic performance. Output and inflation uncertainty on an international level is measured through the conditional variances of common factors in inflation and output growth, estimated from a bivariate dynamic factor model with GARCH errors. The impact of international and country-specific uncertainty is analyzed by including the conditional variances as regressors. We find increases in uncertainty during the first and second oil crisis, the 1980s and 1990s recessions as well as the recent Great Recession to be confined to the international level. The effect of international uncertainty results to be highly significant and unambiguously negative on countries' output growth and inflation rates whereas the impact of country-specific uncertainty is very mixed.

The impact of inflation on the cost of adjustable-rate mortgages

Aim: To assess how inflation affects the cost of adjustable-rate mortgage from the perspective of personal finances.Design / Research methods: Adjustable-Rate Mortgage simulations were carried out, showing both the nominal and real costs of a mortgage loan. The behavior and the relationship between the inflation rate and WIBOR 3M rate were compared.Conclusions / findings: The analysis shows that the real cost of mortgage decreases with an increase in inflation. During the period under review, inflation declined, reducing both the real and nominal cost of the loan. There was a strong positive correlation between the WIBOR 3M rate and the inflation rate. Equally strong, although a negative correlation was observed between the inflation rate and the real interest rate. With the decline in inflation, real mortgage rates increased, and vice versa. Particular attention was paid to the periods in which inflation was rising. WIBOR 3M rate reacted to this increase to a much lesser extent and with a lag compared to the inflation rate.Originality / value of the article: Considering that forecasts presented by the National Bank of Poland predict inflation growth in the coming years, a thorough examination of the inflation impact on the mortgage costs is an important issue for risk management in households with mortgage.

Determinants of corporate credit spread: evidence from India

Understanding the behavior of corporate credit spread is of paramount importance to understand and manage risk in fixed income securities. This study examines the determinants of corporate credit spread in Indian bond market. By adopting a panel data approach, the study estimates a fixed-effects regression equation to analyze the determinants of corporate credit spread in Indian bond market. The variables used in the study are motivated from structural models and macroeconomic variables and include interest rate variables, stock market variables, inflation and economic growth. The study found that the interest rate variables, stock market variables and inflation are the key variables in explaining the level of corporate credit spread in Indian bond market. The results are robust to the traditional approach of using aggregate yield spread for the whole sample and also when the sample was divided using different industrial classification. Overall, the study highlights the importance of stable interest rate and inflationary environment for the development of Indian corporate bond market.

The Inflation-Output Nexus: Empirical Evidence from India, Brazil, and South Africa

In this paper we study the relationship between output and inflation for India, Brazil, and South Africa using the EGARCH model. For India and South Africa, we find evidence for: (1) the Cukierman and Meltzer hypothesis that inflation volatility raises inflation; (2) the Friedman hypothesis that inflation raises inflation volatility; and (3) the Black hypothesis that output volatility raises output growth, and that output volatility reduces inflation. For Brazil, we do not find any evidence of a systematic relationship between inflation and output growth.

FDI and FPI Determinants in Developing African Countries

We examine drivers of foreign direct investment (FDI) and foreign portfolio investment (FPI) in nine selected African economies, during the period 1980 to 2014, with particular interest in the role of financial market development. We set out to explore the drivers of FDI and FPI in selected African countries, respectively. We employ the dynamic GMM methodology to assess the motivators of inward foreign flows. The results show that FDI inflows are generally dependent on past inflows of FDI, low inflation, infrastructural development, and real GDP growth rate; while stock market capitalisation, commercial bank assets gauged against commercial and central bank assets as well as domestic credit to the private sector by banks intermediate for financial market development. On the other hand, we find that FPI inflows are attracted to foreign destinations due to previous FPI inflows, the real exchange rate, inflation rates and the presence of developed infrastructure. Further, developed financial markets, as proxied by stock market capitalisation, were found to significantly and positively influence inward FPI flows, while a closed financial account and low interest rate discouraged FPI. The significant contribution of this paper is that its findings empirically confirm FDI and FPI theory, as postulated in Dunning’s eclectic paradigm insofar as the main “location” variables that enhance host country attractiveness are concerned, specifically in the African context. In light of these findings, we recommend that policy makers strengthen their domestic markets, complemented by appropriate regulations and institutions to attract foreign investment flows, while reducing their dependency on international aid and loans.

The Causal Relationship between Inflation and Economic Growth: An Empirical Study in Sri Lanka

Many studies test the relationship between inflation and Economic growth in several countries. This study aims to find long run causal relationship between the inflation and economic growth in Sri Lanka over the period from 1960 to 2015 using annual data. Johansen co-integration technique and Vector Error Correction Model (VECM) are used to investigate the relationships. The empirical results confirm a bidirectional causality between the inflation and Economic growth. However, it finds that there is no short run causality between inflation and economic growth. The result may be useful for monetary decision makers and development partners in the sense to keep inflation rate in appropriate level.

GDP AS A FACTOR INFLUENCING THE SOCIAL INDICATORS OF UKRAINE'S LIVELIHOOD: MODELLING

In the period 1996-2017, the dynamics of the subsistence minimum, the minimum wage, the consumer price index and the gross domestic product of Ukraine are analysed. These indicators have a growing trend. The necessity to use the mathematical modelling to study social and economic indicators of living standards of the population is emphasised. The trend of the dynamics of the minimum wage in the UAH is given. It has a tendency to increase. This tendency is described by quadratic dependence. The following periods are distinguished: 1996-2010 – the smooth growth of wages in quadratic dependence; 2010-2016 years – their slowed down growth by linear dependence. From 2017, when average wage has increased two times, the period of significant wages growing begins. Minimum wage retardation from the subsistence minimum until 2017 is shown. The dynamics of the subsistence minimum, which has the same periods and regularities as the salary, is analysed. Its trend is presented. The dynamics of the consumer price index is analysed. It has been broken down into the following intervals: I (1996-2010) – steady inflation growth; II (2010-2013) – price stability; III (2014 – until now) – rapid growth of prices or inflation. The inflation forecasting for 2018 is given. It is shown that economic growth (GDP) and social standards are cyclical. The main tendencies of the influence of the gross domestic product on the minimum wage, the consumer price index, the subsistence minimum are summarized. The dependence of the minimum wage on the volume of GDP is given. Econometric models of the dependence of the minimum wage on GDP in UAH and the level of inflation from the minimum wage are presented. It is shown that GDP growth is accompanied by the minimum wage increase. It is emphasized that growth of social payments negatively affects the growth of the consumer price index. It is noted that the rate of growth of the economy is not sufficient to ensure the growth of social benefits. The recommendations for economic growth are given.

La inconsistencia temporal y la inflación: evidencias empíricas para la economía colombiana

Este trabajo toma como estudio de caso a Colombia y busca verificar las restricciones que el problema de la incoherencia temporal impone sobre las series de tiempo de inflación y desempleo. Es analizado el período 1976-2006 para la economía colombiana y los resultados de las pruebas estadísticas muestran que durante el periodo 1976-1991 se comprueban las restricciones del problema de la incoherencia dinámica. En particular, es posible que los errores en la conducción de la política monetaria fueran en parte los responsables por el crecimiento de la inflación en dicho período.

Impact of Macroeconomic Variables on BSE Indices

Movements of stock indices are highly influential and volatile. Any changes in factors having an impact on these indices are important in recording sensitive data regarding changes in the market conditions and the fundamentals of the economy. Stock market changes are influenced by micro and macroeconomic variables as well as certain other unpredictable subjective factors. This paper conducts a study to investigate about the nexus between a few selected macroeconomic variables and Bombay Stock Exchange (BSE) returns in India. The objective is to make the investors aware of the factors that affect their investment in stock indices. Data for the study were collected from secondary sources like government publications, newspaper, and magazines, reports of committee and commissions and various other private publications. Data were analyzed using “unit root test”, “Granger causality test” and “multiple regression analysis”. The finding of the study shows a negative relationship between gold growth rate, silver growth, and BSE returns. The relativity between inflation rate and the exchange rate is favourable when compared with BSE returns. Granger Causality test and the Regression analysis concludes that exchange growth rate and the inflation growth rate are the two variables which affect BSE returns.

Inflation and equity mutual fund flows

We document a negative relation between inflation and aggregate equity mutual fund flows and hypothesize that this relation is partly due to inflation illusion on the part of investors. Inflation illusion occurs when investors fail to incorporate the effect of inflation into their estimates of nominal growth rates. Consequently, they lower their estimates of the intrinsic values of stocks and move their assets away from equities. Our results are robust to controls for alternative explanations such as inflation proxying for poorer future real cash flow growth and periods of higher inflation being associated with higher equity risk premia.

PENGARUH VARIABEL MONETER DAN NON MONETER TERHADAP PERTUMBUHAN EKONOMI DI INDONESIA

This study aims to determine and analyze the influence between monetary variables consisting of foreign investment and inflation on economic growth, and the influence of non-monetary variables consisting of total labor force and economic growth. The type of this research is descriptive research, where the data used is the time series data from 1984 to 2015 obtained from the World Bank and Central Bureau of Statistics (BPS) website, which is analyzed by Ordinary Least Square (OLS) method. The results of this study indicate that the monetary variables of foreign investment have a positive and significant impact on economic growth in Indonesia and inflation has a negative and significant effect on economic growth in Indonesia, while the non-monetary variable is the total labor force has an insignificant and positive effect on economic growth in Indonesia and Government spending has a significant and positive impact on economic growth in Indonesia.

The Information Content of the Term Structure of Interest Rates in Emerging Economies: The Case of Thailand

This article studies the information content of the term structure of interest rates of Thai government bonds. Using monthly data from July 2001 to December 2013, this article tests whether the term structure contains information about future interest rates, inflation and gross domestic product (GDP) growth. The results suggest that, despite the low liquidity of the Thai government bond market, the term structure contains considerable information about future interest rates and GDP growth. JEL Classification: E43, E44, G12

The Analysis Of The Relationship Between Inflation, Unemployment And Economic Growth In Nigeria (1980-2014).

This research work investigates the relationship between inflation, unemployment and economic growth in Nigeria (1980-2014). The objectives of the study is to examine the short run and the long run relationship between inflation, unemployment and economic growth in Nigeria. It begins with the application of Augmented Dickey-Fuller techniques to examine the unit root property of the time series data after which Autoregressive Distributive Lag Model (ARDL) was used to determine the cointegration or long-run relationship. Lastly, Vector Autoregressive (VAR) model test was conducted to investigate the causal relationship between the variables studied. Empirical findings from ARDL model shows that there is no short and the long run relationship between unemployment rate, inflation rate and real GDP growth rate in Nigeria. The results of VAR model do not indicate robust evidence and do not confirm an inverse linkage between unemployment rate and economic growth. In view of the foregoing, the study therefore recommends the adoption of fiscal measures that enhance economic growth and private sector activities, hence promoting economic growth and employment generation. In addition, key economic incentives are needed towards attracting foreign direct investment (FDI) in productive sectors of the national economy and expanding resource utilization base.