چکیده:
This study aims to evaluate the link between economic growth and consumer price index (CPI) in Japan for the period of 1980-2014. Initial series were adjusted for stationarity using the Augmented Dickey- Fuller (ADF) test for unit root followed by the application of Johansen Co-integration Test in order to examine the long-run relationship among the variables, while the causalities were evaluated using Granger Causality model. The empirical results reveal that economic growth and CPI are co-integrated and thus exhibit a long-run relationship between the variables. The Granger causality test supports bi-directional causality between economic growth and CPI in Japan. The paper adopts a time series framework of the Vector Error Correlation Models (VECM) to study the dynamic relationship between economic growth and consumer price index for Japan.
خلاصه ماشینی:
Initial series were adjusted for stationarity using the Augmented Dickey- Fuller (ADF) test for unit root followed by the application of Johansen Co-integration Test in order to examine the long-run relationship among the variables, while the causalities were evaluated using Granger Causality model.
The empirical results reveal that economic growth and CPI are co-integrated and thus exhibit a long-run relationship between the variables.
The paper adopts a time series framework of the Vector Error Correlation Models (VECM) to study the dynamic relationship between economic growth and consumer price index for Japan .
: Co-integration, Consumer price index, Economic growth, Granger causality test, Inflation, Vector error correction 1.
Berber and Artan (2004) tested the relationship between inflation and economic growth for the period of 1987-2003 using Granger causality analysis.
The study employed the co-integration and Granger causality test where Consumer Price Index (CPI) was used as a proxy for inflation and the GDP as a perfect proxy for economic growth to examine the relationship.
The result of the test showed that, for the period of 1970-2005, there was no co- integrating relationship between inflation and economic growth for Nigeria’s data.
Chaudhry, Qamber, and Farooq (2012) investigate the long and short run relationships of monetary policy, inflation, and economic growth in Pakistan during 1972 to 2010.
1. Unit root tests Johansen co-integration analysis is used to analyze any long-term co- integration relationships between economic growth and CPI.