Inter-Relationship between Economic Growth, Savings and Inflation in Asia

26 Pages Posted: 12 Aug 2008

See all articles by Vaibhav Chaturvedi

Vaibhav Chaturvedi

IIM Ahmedabad

Ravindra H. Dholakia

affiliation not provided to SSRN

Brajesh Kumar

Jindal Global Business School; IIM Ahmedabad

Date Written: August 8, 2008

Abstract

The present study examines the inter-relationship between economic growth, savings rate and inflation for south-east and south Asia in a simultaneous equation framework using two stage least squares with panel data. The relationship between savings rate and growth has been found to be bi-directional and positive. Inflation has a highly significant negative effect on growth but positive effect on savings rate. Inflation is not affected by growth but is largely determined by its past values and savings rate is not affected by interest rate. These findings for countries in Asia with widely divergent values of aggregates are very relevant for development policies and strategies.

Keywords: Growth, Savings, Inflation, Asia, Simultaneity, Fixed-Effect

JEL Classification: C33, E21, E31, E60, O57

Suggested Citation

Chaturvedi, Vaibhav and Dholakia, Ravindra H. and Kumar, Brajesh, Inter-Relationship between Economic Growth, Savings and Inflation in Asia (August 8, 2008). Available at SSRN: https://ssrn.com/abstract=1212096 or http://dx.doi.org/10.2139/ssrn.1212096

Vaibhav Chaturvedi (Contact Author)

IIM Ahmedabad ( email )

Vastrapur
Ahmedabad, Gujarat 380015
India

Ravindra H. Dholakia

affiliation not provided to SSRN ( email )

Brajesh Kumar

Jindal Global Business School ( email )

University Sonipat-Narela Road
Near Jagdishpur Vill
Sonipat, Haryana 131001
India
+918930110773 (Phone)

HOME PAGE: http://www.jgbs.edu.in

IIM Ahmedabad ( email )

Vastrapur
Ahmedabad, Gujarat 380 015
India

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