چکیده:
T his empirical analysis endeavors to trace out the causal nexus between core inflation and economic growth from the perspective of twenty worlds’ leading economy with the help of the nonlinear Granger causality approach by using time series data from 1981 to 2016. Based on nonlinear Granger causality results, it has been found that there is unidirectional casualty running from core inflation to economic growth in Belgium, Denmark, Franc, Greece, India, Norway, and Portugal as well as Sweden. In these countries, core inflation is causing economic growth. As per as Australia, Canada, Germany, Greece, Japan, New Zealand, Portugal, Sweden, Switzerland, and the United Kingdom is concerned the outcome of causality analysis documents that there is unidirectional causality running from economic growth towards the core inflation. Finally, the analysis also manifests that there is no causality running from core inflation towards the economic growth and vice-versa in Ireland, Israel, Netherlands, and Spain.
خلاصه ماشینی:
A Nonlinear Granger Causality Analysis Amritkant Mishra*1, Amba Agarwal2 Received: 2018, February 6 Accepted: 2018, August 19 his empirical analysis endeavors to trace out the causal nexus between core inflation and economic growth from the perspective of twenty worlds’ leading economy with the help of the nonlinear Granger causality approach by using time series data from 1981 to 2016.
Most of the empirical research applied causality approach to finding out the nexus between economic growths and headline inflation with the assumption of the existing linear relationship between these variables.
(2016) investigated the nonlinear nexus between inflation and economic growth from a sample period of 1994: Q1 and 2016: Q2 in South Africa by applying a smooth transition regression (STR) model.
All the authors applied traditional Granger causality method to test the casualty between inflation and economic growth without any consideration of the possible existence of a nonlinear relationship between these variables for detecting linear causality, which is not able to capture nonlinear relations (Baek and Brock, 1992; Hiemstra and Jones, 1994).
2 Methodology One of the relevant objectives of this paper is to traces the causality between economic growth and core inflation by the assumption of a nonlinear relationship between the variables.
Firstly, on the basis of nonlinear Granger causality approach, it has found that there is unidirectional casualty running from core inflation to economic growth in the countries such as Belgium, Denmark, Franc, Greece, India, Norway, Portugal, and Sweden.