Tải bản đầy đủ

The impact of inflation on economic growth evidence from a panel of selected asia countries

UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM

INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS

VIETNAM - NETHERLANDS
PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

THE IMPACT OF INFLATION ON ECONOMIC
GROWTH: EVIDENCE FROM A PANEL OF
SELECTED ASIA COUNTRIES
A thesis submitted in partial fulfilment of the requirements for the degree of
MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By
VU DOAN THANH TIEN

Academic Supervisor:

Dr. LE CONG TRU

HO CHI MINH CITY, AUGUST 2012
i


DECLARATION
“I certify that the substance of this thesis has not already been submitted for any degree and
have not been currently submitted for any other degree.
I certify that to the best of my knowledge and help received in preparing this thesis and all
sources used have been acknowledged in this thesis.”

ii


ACKNOWLEDGEMENTS
The first person I would like to send special thanks to is my supervisor - Dr. Le Cong Tru. I’m
grateful not solely his help throughout the thesis process, but also enthusiasm and many
lessons in an attempt to improve my knowledge and skills as well. He is usually ready to
assist me anytime, although he is bustling. The professor often keeps track of my work and
motivates me to finish the duty. To gain the result today, I cannot miss out his contributions.
Thanks so much, Dr.Tru!
Next, I’m happy to thank to Dr. Hoai, Dr. Ngai, and Dr. Nam. They tried their best to help me
select an appropriate topic for my thesis. When I confront to issues, they supported to find the
solution and give advice in hope that I might overcome the problems. Besides, I also thank to
the other professors of VNP for lectures and precious materials.
At the same time, I also send thanks to VNP officials, especially Ms. Hong. They are very
nice in helping me when having troubles. They inform exactly and quickly to students. I enjoy
their enthusiasm. Additionally, I also send thanks to Mr. Quy - a librarian. He is nice to his
duty. I’m always welcomed by him.
Last but not least, I cannot forget sending thanks to my family and friends. I’m very grateful
them to take care of and encourage me while performing the thesis. Not only do they support
for finance, but also for mental. I always keep in mind devotion and sacrifice of all.
Thanks so much for everything!!!

iii


TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................. IV


LIST OF FIGURES .................................................................................................... VII
LIST OF TABLES ..................................................................................................... VIII
ABSTRACT .................................................................................................................... 2
CHAPTER 1 .................................................................................................................... 3
INTRODUCTION .......................................................................................................... 3
1.1 PROBLEM STATEMENT..................................................................................... 3
1.2 RESEARCH OBJECTIVES AND RESEARCH QUESTIONS ........................... 5
1.3 STRUCTURE OF THE PAPER ............................................................................ 6
CHAPTER 2.................................................................................................................... 8
LITERATURE REVIEW .............................................................................................. 8
2.1 THEORIES RELATED TO INFLATION AND GROWTH ................................. 8
2.1.1

Classical Theory ......................................................................................... 9

2.1.2

Neo-Classical Theory .................................................................................9

2.1.3

Endogenous Theory .................................................................................10

2.1.4

Keynesian Theory .................................................................................... 10

2.1.5

Neo-Keynesian Theory ............................................................................ 11

2.1.6

Monetarist Theory .................................................................................... 11

2.2 GROWTH MODELS .......................................................................................... 12
2.2.1

The Basic Growth Model .........................................................................13

2.2.2

Solow Model ............................................................................................ 13

2.2.3

Augmented Solow Model ........................................................................14

2.3 VARIABLE DEFINITION .................................................................................. 15
2.3.1

Growth Rate ............................................................................................. 15

2.3.2

Inflation ....................................................................................................16

2.3.3

Cost of Inflation ....................................................................................... 17

2.3.4

Control Variables...................................................................................... 18

2.3.5

Threshold Concept ...................................................................................21
iv


2.4 EMPIRICAL STUDIES ....................................................................................... 21
2.4.1

The Studies of 1960s-1980s .....................................................................22

2.4.2

The Studies of 1990s ................................................................................23

2.4.3

Recent Studies .......................................................................................... 26

CHAPTER 3.................................................................................................................. 31
ECONOMIC OUTLOOKS OF STUDIED COUNTRIES ....................................... 31
3.1 Economic Outlook of Vietnam ............................................................................ 32
3.2 Economic Outlook of Philippines ........................................................................ 34
3.3 Economic Outlook of Malaysia ........................................................................... 36
3.4 Economic Outlook of Indonesia .......................................................................... 39
3.5 Economic Outlook of Thailand ............................................................................ 42
3.6 Economic Outlook of China ................................................................................ 44
3.7 Economic Outlook of India.................................................................................. 46
CHAPTER 4.................................................................................................................. 49
MODEL SPECIFICATION & RESEARCH METHODOLOGY ........................... 49
4.1 EMPIRICAL MODEL ......................................................................................... 49
4.2 MODEL SPECIFICATION ................................................................................. 50
4.2.1

Non-Linear Inflation-Growth Relationship .............................................50

4.2.2

Testing Thresholds in the Inflation-Growth Relationship........................ 51

4.3 DATA ................................................................................................................... 52
4.4 . RESEARCH METHODS .................................................................................. 53
CHAPTER 5.................................................................................................................. 57
EMPIRICAL RESULTS .............................................................................................. 57
5.1 DESCRIPTIVE ANALYSIS ................................................................................ 57
5.1.1

China ........................................................................................................57

5.1.2

India .........................................................................................................60

5.1.3

Indonesia ..................................................................................................62

5.1.4

Malaysia ...................................................................................................64

5.1.5

Philippines................................................................................................ 66

5.1.6

Thailand ...................................................................................................68

5.1.7

Vietnam ....................................................................................................70

5.2 REGRESSION ANALYSIS ................................................................................. 72
5.2.1

China ........................................................................................................75
v


5.2.2

India .........................................................................................................75

5.2.3

Indonesia ..................................................................................................76

5.2.4

Malaysia ...................................................................................................76

5.2.5

Philippines................................................................................................ 77

5.2.6

Thailand ...................................................................................................78

5.2.7

Vietnam ....................................................................................................78

5.3 INFLATION THRESHOLD ANALYSIS ............................................................ 79
5.3.1

Threshold Results of China ......................................................................79

5.3.2

Threshold results of India ........................................................................80

5.3.3

Threshold results of Indonesia .................................................................81

5.3.4

Threshold Results of Malaysia .................................................................82

5.3.5

Threshold Results of Philippines ............................................................. 84

5.3.6

Threshold Results of Thailand .................................................................85

5.3.7

Threshold Results of Vietnam ..................................................................86

CHAPTER 6.................................................................................................................. 89
CONCLUSIONS, POLICY RECOMMENDATION, LIMITATIONS AND FUTHER
STUDY........................................................................................................................... 89
6.1 CONCLUSIONS ................................................................................................. 89
6.2 POLICY RECOMMENDATIONS ...................................................................... 90
6.3 LIMITATIONS .................................................................................................... 92
6.4 FURTHER STUDY ............................................................................................. 92
REFERENCES ............................................................................................................. 93
APPENDIX A ................................................................................................................ 99
APPENDIX B .............................................................................................................. 101
APPENDIX C.............................................................................................................. 107
APPENDIX D............................................................................................................... 113

vi


LIST OF FIGURES
Figure 2-1: Analysis framework for the impact of inflation on growth and thresholds remained
in the relationship ....teroscedastiscity with White test method of
Vietnam

112


APPENDIX D
The scatter diagrams present the relationship between variables in the
model of the countries
.584

10

16.5

.580

8

16.0
15.5

.572
.568

GOV_CH

6
EX_CH

EMPL_CH

.576

4
2

.564

.556

13.5

-2
2

4

6

8

10

12

14

16

14.5
14.0

0

.560

15.0

13.0
2

4

6

8

Y_CH

10

12

14

16

2

4

6

Y_CH

25
20

8

10

12

14

16

12

14

16

Y_CH

44

80

42

70

40

60

10

SCH_CH

INV_CH

INF_CH

15

38

50

5
36

0
-5

40

34
2

4

6

8

10

12

14

16

30
2

4

6

8

Y_CH

10

Y_CH

12

14

16

2

4

6

8

10

Y_CH

10

TFP_CH

5

0

-5

-10
2

4

6

8

10

12

14

16

Y_CH

Figure D-1: The scatter diagrams describe the correlation between the
variables in the model of China

113


40

6

60

36

4

56

32

2

0

INV_ID

64

SCH_ID

TFP_ID

8

52

48

-2

24

44
2

3

4

5

6

7

8

9

10 11

20
2

3

4

5

6

Y_ID

7

8

9

10 11

2

3

4

5

Y_ID

14
12
10

6

7

8

9

10 11

8

9

10 11

Y_ID

13.6

1

13.2

0

12.8

-1

8
6

EX_ID

12.4
GOV_ID

INF_ID

28

12.0

-4
-5

10.8

2

10.4
2

3

4

5

6

7

8

9

10 11

-3

11.6
11.2

4

-2

-6
2

3

4

5

6

Y_ID

7

Y_ID

8

9

10 11

2

3

4

5

6

7

Y_ID

.43
.42

EMPL_ID

.41
.40
.39
.38
.37
.36
2

3

4

5

6

7

8

9

10 11

Y_ID

Figure D-2: The scatter diagrams describe the correlation between the
variables in the model of India

114


8

80

40

76

4

36
72

-4
-8

32
INV_IN

68
SCH_IN

TFP_IN

0

64
60
56

-12

28
24

52
20

-16
-20
-16

48
-12

-8

-4

0

4

8

44
-16

12

-12

-8

-4

Y_IN

0

4

8

16
-16

12

50
40

-4

0

4

8

12

4

8

12

Y_IN

9.0

12

8.5

10

8.0

8

30
20

EX_IN

7.5
GOV_IN

INF_IN

-8

Y_IN

60

7.0

-8

-4

0

4

8

12

4
2
0

5.5

-12

6

6.5
6.0

10
0
-16

-12

5.0
-16

-12

-8

-4

Y_IN

0

Y_IN

4

8

12

-2
-16

-12

-8

-4

0

Y_IN

.45

EMPL_IN

.44

.43

.42

.41
-16

-12

-8

-4

0

4

8

12

Y_IN

Figure D-3: The scatter diagrams describe the correlation between the
variables in the model of Indonesia

115


8

75

45

4

40
70

-8

INV_MA

35
SCH_MA

TFP_MA

0
-4

65

25

-12

60
20

-16
-20

55
-8

-4

0

4

8

12

15
-8

-4

0

Y_MA

4

8

12

-8

-4

0

Y_MA

6

4

8

12

4

8

12

Y_MA

14

5

25
20

13

4

15

3

12

EX_MA

GOV_MA

INF_MA

30

11

2

10
5

10

1
0

0

9
-8

-4

0

4

8

12

-5
-8

-4

0

Y_MA

4
Y_MA

8

12

-8

-4

0
Y_MA

.400
.395

EMPL_MA

.390
.385
.380
.375
.370
.365
-8

-4

0

4

8

12

Y_MA

Figure D-4: The scatter diagrams describe the correlation between the
variables in the model of Malaysia

116


6

84

26

4

82

24

80

0
-2

22

78

INV_PH

SCH_PH

TFP_PH

2

76

18

74

-4

16

72

-6

70
-1

0

1

2

3

4

5

6

7

8

20

14
-1

0

1

2

Y_PH

3

4

5

6

7

8

-1

0

1

2

Y_PH

20

14

16

13

12

12

3

4

5

6

7

8

5

6

7

8

Y_PH

4

8

0
-2
EX_PH

GOV_PH

INF_PH

2

11

4

10

0

9

-4
-6
-8
-10

-1

0

1

2

3

4

5

6

7

8

-12
-1

0

1

2

Y_PH

3

4

Y_PH

5

6

7

8

-1

0

1

2

3

4

Y_PH

.395
.390

EMPL_PH

.385
.380
.375
.370
.365
.360
-1

0

1

2

3

4

5

6

7

8

Y_PH

Figure D-5: The scatter diagrams describe the correlation between the
variables in the model of Philippines

117


5

80

44

70

40

60

36

-5

INV_TH

SCH_TH

TFP_TH

0

50

32

40

28

30

24

-10

-15
-12

-8

-4

0

4

8

20
-12

12

-8

-4

Y_TH

4

8

5

12.5

20

12.0

15

EX_TH

GOV_TH

10.5

0

4

8

12

9.0
-12

0

4

8

12

4

8

12

5
0
-5

9.5

-4

-4

10

11.0

10.0

-5

-8

-8

Y_TH

11.5

0

-10
-12

20
-12

12

Y_TH

10

INF_TH

0

-8

-4

Y_TH

0
Y_TH

4

8

12

-10
-12

-8

-4

0
Y_TH

.55
.54

EMPL_TH

.53
.52
.51
.50
.49
.48
-12

-8

-4

0

4

8

12

Y_TH

Figure D-6: The scatter diagrams describe the correlation between the
variables in the model of Thailand

118


5

30

44

4

40

20
3

36
10

1
0
-1

32
INV_VN

SCH_VN

TFP_VN

2

0
-10

24
20

-2
-20

16

-3
-4

-30
3

4

5

6

7

8

12
3

4

5

Y_VN

6

7

8

3

4

5

Y_VN

80

6

7

8

6

7

8

Y_VN

8.5

70

-2
-4

8.0

60

-6
7.5

40
30

-8
EX_VN

GOV_VN

50
INF_VN

28

7.0

-10
-12

6.5

20

-14
6.0

10
0

-16

5.5
3

4

5

6

7

8

-18
3

4

5

Y_VN

6
Y_VN

7

8

3

4

5
Y_VN

.58
.56

EMPL_VN

.54
.52
.50
.48
.46
.44
3

4

5

6

7

8

Y_VN

Figure D-7: The scatter diagrams describe the correlation between the
variables in the model of Vietnam

119



Tài liệu bạn tìm kiếm đã sẵn sàng tải về

Tải bản đầy đủ ngay

×