Causal Nexus between Inflation and Economic Growth of Japan
نویسندگان
1 Associate Professor, Department of International Finance, I-Shou University, Taiwan
2 Assistant Professor, Department of Commerce, GraphicEra Hill University, Uttarakhand, India
doi
10.22059/ier.2015.56846چکیده
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.
