Premium
Inflation and Productivity: Empirical Evidence from Europe
Author(s) -
Tsionas Efthymios
Publication year - 2003
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/1467-9396.00372
Subject(s) - economics , granger causality , inflation (cosmology) , productivity , econometrics , causality (physics) , empirical evidence , macroeconomics , cointegration , physics , quantum mechanics , theoretical physics , philosophy , epistemology
The paper investigates the empirical association between inflation and productivity in 15 European countries over the period 1960–97. Modern econometric techniques based on integration and cointegra– tion analysis are used to test for the existence of a long–run relationship between inflation and productivity. Recently developed causality tests for possibly cointegrated VAR models are also applied instead of relying on standard Granger causality tests which are inappropriate in the presence of nonstationary variables.