Publication:
Budget deficits and inflation in thirteen Asian developing countries
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Date
2011
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Abstract
In this study we attempt to determine the long-run relationship between budget deficit and inflation in thirteen Asian developing countries, namely; Indonesia, Malaysia, the Philippines, Myanmar, Singapore, Thailand, India, South Korea, Pakistan, Sri Lanka, Taiwan, Nepal and Bangladesh. Using annual data for the period 1950-1999 our Granger causality within the error-correction model (ECM) framework suggest that all variables involved (budget deficits, money supply and inflation) are integrated of order one. Our ECM model estimates indicate the existence of a long-run relationship between inflation and budget deficits. Thus, we conclude that budget deficits are inflationary in Asian developing countries
Keywords
Granger causality , Asian countries , Budget deficit
Citation
Habibullah, Muzafar Shah and Chee, Kok Cheah and Abdul Hamid, Baharom. (2011). Budget deficits and inflation in thirteen Asian developing countries. International Journal of Business and Social Science, 2 (9). pp. 192-204.
Publisher
Center for Promoting Ideas
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