Inflation and macroeconomic variables : evidence from panel data

Issues involving inflation has generated an enormous volume of literature and heated debate in recent years as different school of thoughts view the contrast cause and have different policies for fighting inflation. This study examines the relationship between selected independent variables and infl...

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Main Author:	Ruphajivany, Sanjeven
Format:	Thesis
Language:	eng eng
Published:	2018
Subjects:	HB Economic Theory HG Finance
Online Access:	https://etd.uum.edu.my/7831/1/s822569_01.pdf https://etd.uum.edu.my/7831/2/s822569_02.pdf
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id	my-uum-etd.7831
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Nayan, Sabri
topic	HB Economic Theory HG Finance
spellingShingle	HB Economic Theory HG Finance Ruphajivany, Sanjeven Inflation and macroeconomic variables : evidence from panel data
description	Issues involving inflation has generated an enormous volume of literature and heated debate in recent years as different school of thoughts view the contrast cause and have different policies for fighting inflation. This study examines the relationship between selected independent variables and inflation and theory that can explain inflation in selected developed and developing countries of ASEAN and G7 countries using panel data analysis. The main variable of this study is money supply and unemployment. This study focus on the Quantity Theory of Money proposed by Irving Fisher and Phillips Curve. The issue that is brought forward is Keynesian’s argument that Fisher’s equation (MV=PT) is truism and only appropriate at full employment where it is impossible in the current situation. Hence, this employed study is to prove whether the Fisher’s equation is appropriate in the long-run or short-run. The argument of the Phillips Curve flattening is brought forward by authors, stating that the curve is appropriate in the short-run. Therefore, the motivation of this study is to prove that the Fisher’s Theory and the Phillips Curve is still appropriate in explaining inflationary problem. The empirical method to be employed are POLS regression, Granger Causality Test, Panel ARDL and Pooled Mean Group (PMG) estimation. The results from POLS regressions revealed that that money supply is significant to inflation (measured at CPI), and the Panel ARDL results indicate that the significance is for the long-run. There are two policy implications that is proposed in this study. First, the governments should put in place considerable reforms that will certify that the velocity of the supply of money in the market is constantly monitored and controlled. The central banks should also consider monetary policy as a suitable tool of achieving price stability because of the linear interdependency and causality between the price level and money supply growth. Second, the concerned policy makers as well as the government who are accountable for optimum level of inflation for sustainable growth and development should reduce the unemployment rate by opening more job opportunities for fresh graduates, although they are lack of job experience. This is to achieve the full employment rate in the economy.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Ruphajivany, Sanjeven
author_facet	Ruphajivany, Sanjeven
author_sort	Ruphajivany, Sanjeven
title	Inflation and macroeconomic variables : evidence from panel data
title_short	Inflation and macroeconomic variables : evidence from panel data
title_full	Inflation and macroeconomic variables : evidence from panel data
title_fullStr	Inflation and macroeconomic variables : evidence from panel data
title_full_unstemmed	Inflation and macroeconomic variables : evidence from panel data
title_sort	inflation and macroeconomic variables : evidence from panel data
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2018
url	https://etd.uum.edu.my/7831/1/s822569_01.pdf https://etd.uum.edu.my/7831/2/s822569_02.pdf
_version_	1747828273260265472
spelling	my-uum-etd.78312021-08-11T06:56:47Z Inflation and macroeconomic variables : evidence from panel data 2018 Ruphajivany, Sanjeven Nayan, Sabri Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HB Economic Theory HG Finance Issues involving inflation has generated an enormous volume of literature and heated debate in recent years as different school of thoughts view the contrast cause and have different policies for fighting inflation. This study examines the relationship between selected independent variables and inflation and theory that can explain inflation in selected developed and developing countries of ASEAN and G7 countries using panel data analysis. The main variable of this study is money supply and unemployment. This study focus on the Quantity Theory of Money proposed by Irving Fisher and Phillips Curve. The issue that is brought forward is Keynesian’s argument that Fisher’s equation (MV=PT) is truism and only appropriate at full employment where it is impossible in the current situation. Hence, this employed study is to prove whether the Fisher’s equation is appropriate in the long-run or short-run. The argument of the Phillips Curve flattening is brought forward by authors, stating that the curve is appropriate in the short-run. Therefore, the motivation of this study is to prove that the Fisher’s Theory and the Phillips Curve is still appropriate in explaining inflationary problem. The empirical method to be employed are POLS regression, Granger Causality Test, Panel ARDL and Pooled Mean Group (PMG) estimation. The results from POLS regressions revealed that that money supply is significant to inflation (measured at CPI), and the Panel ARDL results indicate that the significance is for the long-run. There are two policy implications that is proposed in this study. First, the governments should put in place considerable reforms that will certify that the velocity of the supply of money in the market is constantly monitored and controlled. The central banks should also consider monetary policy as a suitable tool of achieving price stability because of the linear interdependency and causality between the price level and money supply growth. Second, the concerned policy makers as well as the government who are accountable for optimum level of inflation for sustainable growth and development should reduce the unemployment rate by opening more job opportunities for fresh graduates, although they are lack of job experience. This is to achieve the full employment rate in the economy. 2018 Thesis https://etd.uum.edu.my/7831/ https://etd.uum.edu.my/7831/1/s822569_01.pdf text eng public https://etd.uum.edu.my/7831/2/s822569_02.pdf text eng public https://sierra.uum.edu.my/record=b1699337~S1 masters masters Universiti Utara Malaysia Abdurehman, A. 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Inflation and macroeconomic variables : evidence from panel data

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