The Effects of Inflationon Economic Growth: Lessons From Latin America

October 1, 1991

Preview Citation

Format: Chicago

Jose De Gregorio. The Effects of Inflationon Economic Growth: Lessons From Latin America, (USA: International Monetary Fund, 1991) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper investigates the relationship between inflation and long-run growth. It presents an endogenous growth model that illustrates the channels through which inflation affects growth. The model highlights the effects of inflation on the productivity of capital and the rate of capital accumulation. The reduction in growth is caused by a diversion of resources away from activities that lead to faster rates of growth toward activities associated with reducing the costs of inflation. The negative association between inflation and growth is assessed empirically for a sample group of Latin American countries.

Subject: Capital productivity, Consumption, Government consumption, Inflation, Labor, Labor supply, National accounts, Prices, Production

Keywords: Capital mobility, Capital productivity, Consumption, Eastern Europe, Factor productivity, Forecasting inflation, Government consumption, Growth effect, Inflation, Inflation rate, Investment rate, Labor supply, Rate of inflation, WP

Publication Details

Pages:

15
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1991/095
Stock No:

WPIEA0951991
ISBN:

9781451950304
ISSN:

1018-5941

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