Inflation, government expenditure and real income in the long-run

Girijasankar Mallik, Anis Chowdhury

    Research output: Contribution to journalArticle

    14 Citations (Scopus)

    Abstract

    This paper examines the relationship between inflation and real income in Australia, Canada, Finland, New Zealand, Spain, Sweden and the UK which have adopted a "formal" policy of low or zero inflation target. Using cointegration analysis and a vector error correctin model (VECM), we find that the long-run relationship between inflation and real income is positive in most cases. We further find that contrary to the belief of new-classical economics, government expenditure too is positively related to real income in the long-run.

    Original languageEnglish
    Pages (from-to)240-250
    Number of pages11
    JournalJournal of Economic Studies
    Volume29
    Issue number3
    DOIs
    Publication statusPublished - 2002

    Keywords

    • central government
    • cointegration
    • income
    • inflation (finance)
    • money
    • policy
    • Policy
    • Money
    • Central government
    • Inflation
    • Cointegration
    • Income

    Fingerprint

    Dive into the research topics of 'Inflation, government expenditure and real income in the long-run'. Together they form a unique fingerprint.

    Cite this