Financial Development and Inflation-Unemployment Trade-off: Empirical Evidence from Developing and Developed Countries
In the growing literature on “Maco-Financial Economics” it is important to consider financial development as a supply-side policy and investigate its effects on macroeconomic variables such as economic growth, inflation, and unemployment. According to the literature, the simultaneous effect of finan...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | fas |
| Published: |
Center for Development Research and Foresight
2020-08-01
|
| Series: | پژوهشهای برنامه و توسعه |
| Subjects: | |
| Online Access: | https://www.journaldfrc.ir/article_104639_9b197db4c7d5f7236ef8f392602c42c4.pdf |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1849467715196026880 |
|---|---|
| author | Mohammad Ali Aboutorabi Mehdi Hajamini Sahar Tohidi |
| author_facet | Mohammad Ali Aboutorabi Mehdi Hajamini Sahar Tohidi |
| author_sort | Mohammad Ali Aboutorabi |
| collection | DOAJ |
| description | In the growing literature on “Maco-Financial Economics” it is important to consider financial development as a supply-side policy and investigate its effects on macroeconomic variables such as economic growth, inflation, and unemployment. According to the literature, the simultaneous effect of financial development on inflation and unemployment is missing. This paper calculates a multi-lateral financial development index by Principle Components Analysis (PCA) for 20 selected countries during 1979Q1-2016Q4. Then, the augmented Phillips curve is estimated using ARDL model for each countries. The results reveal that the inflation-unemployment trade-off is significantly reduced in some developed and developing countries by financial policies, while some other developing countries (as Iran) are still encountered with of inflation-unemployment duality.In the growing literature on “Maco-Financial Economics” it is important to consider financial development as a supply-side policy and investigate its effects on macroeconomic variables such as economic growth, inflation, and unemployment. According to the literature, the simultaneous effect of financial development on inflation and unemployment is missing. This paper calculates a multi-lateral financial development index by Principle Components Analysis (PCA) for 20 selected countries during 1979Q1-2016Q4. Then, the augmented Phillips curve is estimated using ARDL model for each countries. The results reveal that the inflation-unemployment trade-off is significantly reduced in some developed and developing countries by financial policies, while some other developing countries (as Iran) are still encountered with of inflation-unemployment duality. |
| format | Article |
| id | doaj-art-ddf01d04f6c546e68b89b58ba4d616a2 |
| institution | Kabale University |
| issn | 2645-7466 2717-0365 |
| language | fas |
| publishDate | 2020-08-01 |
| publisher | Center for Development Research and Foresight |
| record_format | Article |
| series | پژوهشهای برنامه و توسعه |
| spelling | doaj-art-ddf01d04f6c546e68b89b58ba4d616a22025-08-20T03:26:05ZfasCenter for Development Research and Foresightپژوهشهای برنامه و توسعه2645-74662717-03652020-08-011293410.22034/pbr.2020.104639104639Financial Development and Inflation-Unemployment Trade-off: Empirical Evidence from Developing and Developed CountriesMohammad Ali Aboutorabi0Mehdi Hajamini1Sahar Tohidi2Assistant Professor in Economics, Institute for Humanities and Cultural StudiesAssistant Professor in Economics, Department of Economics, Yazd UniversityM.A. Student of Economics, Tarbiat Modares UniversityIn the growing literature on “Maco-Financial Economics” it is important to consider financial development as a supply-side policy and investigate its effects on macroeconomic variables such as economic growth, inflation, and unemployment. According to the literature, the simultaneous effect of financial development on inflation and unemployment is missing. This paper calculates a multi-lateral financial development index by Principle Components Analysis (PCA) for 20 selected countries during 1979Q1-2016Q4. Then, the augmented Phillips curve is estimated using ARDL model for each countries. The results reveal that the inflation-unemployment trade-off is significantly reduced in some developed and developing countries by financial policies, while some other developing countries (as Iran) are still encountered with of inflation-unemployment duality.In the growing literature on “Maco-Financial Economics” it is important to consider financial development as a supply-side policy and investigate its effects on macroeconomic variables such as economic growth, inflation, and unemployment. According to the literature, the simultaneous effect of financial development on inflation and unemployment is missing. This paper calculates a multi-lateral financial development index by Principle Components Analysis (PCA) for 20 selected countries during 1979Q1-2016Q4. Then, the augmented Phillips curve is estimated using ARDL model for each countries. The results reveal that the inflation-unemployment trade-off is significantly reduced in some developed and developing countries by financial policies, while some other developing countries (as Iran) are still encountered with of inflation-unemployment duality.https://www.journaldfrc.ir/article_104639_9b197db4c7d5f7236ef8f392602c42c4.pdfphillips curvefinancial developmentinflation-unemployment trade-offardl |
| spellingShingle | Mohammad Ali Aboutorabi Mehdi Hajamini Sahar Tohidi Financial Development and Inflation-Unemployment Trade-off: Empirical Evidence from Developing and Developed Countries پژوهشهای برنامه و توسعه phillips curve financial development inflation-unemployment trade-off ardl |
| title | Financial Development and Inflation-Unemployment Trade-off:
Empirical Evidence from Developing and Developed Countries |
| title_full | Financial Development and Inflation-Unemployment Trade-off:
Empirical Evidence from Developing and Developed Countries |
| title_fullStr | Financial Development and Inflation-Unemployment Trade-off:
Empirical Evidence from Developing and Developed Countries |
| title_full_unstemmed | Financial Development and Inflation-Unemployment Trade-off:
Empirical Evidence from Developing and Developed Countries |
| title_short | Financial Development and Inflation-Unemployment Trade-off:
Empirical Evidence from Developing and Developed Countries |
| title_sort | financial development and inflation unemployment trade off empirical evidence from developing and developed countries |
| topic | phillips curve financial development inflation-unemployment trade-off ardl |
| url | https://www.journaldfrc.ir/article_104639_9b197db4c7d5f7236ef8f392602c42c4.pdf |
| work_keys_str_mv | AT mohammadaliaboutorabi financialdevelopmentandinflationunemploymenttradeoffempiricalevidencefromdevelopinganddevelopedcountries AT mehdihajamini financialdevelopmentandinflationunemploymenttradeoffempiricalevidencefromdevelopinganddevelopedcountries AT sahartohidi financialdevelopmentandinflationunemploymenttradeoffempiricalevidencefromdevelopinganddevelopedcountries |