Volume 7, Issue 26 (12-2016)                   jemr 2016, 7(26): 65-87 | Back to browse issues page

XML Persian Abstract Print

Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:
Monjazeb M, Mahmoodi Pati M. Government Size and Inflation in Developing Countries: a Panel Data Approach. jemr 2016; 7 (26) :65-87
URL: http://jemr.khu.ac.ir/article-1-685-en.html
Government Size and Inflation in Developing Countries: a Panel Data Approach
Mohammadreza Monjazeb1 , Mohsen Mahmoodi Pati * 2
1- Kharazmi University
2- , mmp4369@yahoo.com
Abstract:   (8141 Views)

The main objective of this study is: investigate the effect of government size on inflation rate in the 34 countries of the developing countries during the years 1998 to 2013. For this purpose, the index of total government spending as a percentage of GDP, used as government size and then the model of this study has been estimated by using the panel data technique.
The results of this study imply that the government size has had significant negative effect on the inflation rate and also the variables: liquidity growth rate, growth rate of import price and interest rate have had positive effect on the inflation. Furthermore, the growth rate of GDP, with a difference of degree has significant negative effect on inflation. Hence, the most important result of this study is the majority of the general government- spending in Developing countries has led to the Construction costs and investment in infrastructures that has strengthened. The supply side of the economy of these Countries that The origin of this effect can be the retarded economic structures of these countries.

Keywords: Government Size, Inflation, Panel Data Models, Developing Countries
Full-Text [PDF 1861 kb]   (5457 Downloads)    
Type of Study: Applicable | Subject: بخش عمومی
Received: 2013/03/3 | Accepted: 2017/01/29 | Published: 2017/03/1
References
1.  Aghevli, B., Khan, M. (1978), Government deficits and the inflationary process in developing countries, IMF staff papers, Vol. 25, pp. 383–416.
2.  Friedman, B. M. (1978), "Crowding out or Crowding in? Economic Consequences of Financing Government deficits", Brookings Papers on Economic Activity, No: 3, PP: 593-641. [DOI:10.2307/3217952]
3.  Friedman, Milton (1981), "Deficit and Inflation", Newsweek, Feb. 23, P: 44.
4.  Hafer, R. W. and Hein, S. E. (1988), "Further Evidence on the Relationship between Federal Government Debt and Inflation", Economic Inquiry, Vol: 26, PP: 239-251. [DOI:10.1111/j.1465-7295.1988.tb01491.x]
5.  Hamburger, M. J. and Zwick, B. (1981), "Deficits, Money and Inflation", Journal of Monetary Economics, Vol: 7, PP: 141-150. [DOI:10.1016/0304-3932(81)90057-X]
6.  Heller, W.W. (1979), "Balanced Budget Fallacies", Wall Street Journal, March 16, P.22
7.  Pina, G. (2013), Public Expenditure, Inflation and Economic Growth in Cape Verde, Faculty of Economics, University of Coimbra, School of Economics and Management, University of Minho, June 7.
8.  Oluseun, D. (2013), Government Spending and Inflation in Nigeria: An Asymmetry Causality Test, International Journal of Humanities and Management Sciences (IJHMS) Volume 1, Issue 4, PP: 268-277.
9.  Solomon, M. (2004), The Effect of a Budget Deficit on Inflation: The Case of Tanzania, SAJEMS NS Vol 7 (2004) No 1. 100.
10.  17. Iya, I.B. and Aminu, U. (2014), An Empirical Analysis of the Determinants of Inflation in Nigeria, Journal of Economics and Sustainable Development, Vol.5, No.1.
11.  18. Dwyer, Gerald P. (1982), "Inflation and Government Deficits", Economic Inquiry, Vol: XX, PP: 315-329. [DOI:10.1111/j.1465-7295.1982.tb00350.x]
12.  Ahking, F. W., and Miller, S. M. (1985), "The Relationship Between Government Deficits, Money Growth and Inflation" Journal of Macroeconomics, Vol: 7, PP: 447-467. [DOI:10.1016/0164-0704(85)90036-9]
13.  20. Chinedu Ezirim, Mike Muoghalu and Uchenna (2008), Inflation versus public expenditure government in the US, North American Journal of Finance and Banking Research, Vol 2, No 2.
14.  Cosimo Magazzino (2011), The nexus between public expenditure and inflation in the Mediterranean countries, MPRA, Paper No 28493.
15.  Darrat, A. F. (1985), "Inflation and Federal Budget Deficits: Some Empirical Results", Public Finance Quarterly, Vol: 13, PP: 206-215. [DOI:10.1177/109114218501300205]
16.  Dogas, D. (1992), "Market Power in Non-Monetarist Inflation Model for Greece", Applied Economics, Vol: 24, PP: 367-378. [DOI:10.1080/00036849200000150]
17.  Dornbush, R. and Fisher, S. (1981), Budget Deficits and Inflation in M.J. Flanders and A. Razin (eds.), Development in an Inflationary World, Academic Press, Now York.
18.  Dwyer, Gerald P. (1982), "Inflation and Government Deficits", Economic Inquiry, Vol: XX, PP: 315-329. [DOI:10.1111/j.1465-7295.1982.tb00350.x]
19.  Eisner, R. (1989), "Liberal Keynesian', National Review, Vol: 41, P. 47.
20.  Friedman, M. (1968), "The Role of Monetary Policy", American Economic Review, Vol: 58, PP: 1-17.
Add your comments about this article : Your username or Email:
CAPTCHA
Send email to the article author

Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

© 2024 CC BY-NC 4.0 | Journal of Economic Modeling Research

Designed & Developed by : Yektaweb