The growth-inflation nexus for the U.S. from 1801 to 2013: A semiparametric approach

Mehmet Balcilar, Rangan Gupta, Charl Jooste
2017 Journal of Applied Economics  
We try and detect whether there exists a threshold level of inflation for the US economy over 1801-2013, beyond which it has a negative effect on economic growth. We use a combination of nonparametric (NP) and instrumental variable semiparametric (SNP-IV) methods to obtain inflation thresholds for the United States. The results suggest that the relationship between growth and inflation is hump shaped-that higher levels of inflation reduce growth more. Our results consistently show that
more » ... show that inflation above two per cent negatively affects growth.
doi:10.1016/s1514-0326(17)30005-3 fatcat:v6kvsxoking3tfzww45ig4y75i