Budget deficits and inflation in thirteen Asian developing countries
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In this study we attempt to determine the long-run relationship between budget deficit and inflation in thirteen Asian developing countries, namely; Indonesia, Malaysia, the Philippines, Myanmar, Singapore, Thailand, India, South Korea, Pakistan, Sri Lanka, Taiwan, Nepal and Bangladesh. Using annual data for the period 1950-1999 our Granger causality within the error-correction model (ECM) framework suggest that all variables involved (budget deficits, money supply and inflation) are integrated of order one. Our ECM model estimates indicate the existence of a long-run relationship between inflation and budget deficits. Thus, we conclude that budget deficits are inflationary in Asian developing countries
Granger causality , Asian countries , Budget deficit
Habibullah, Muzafar Shah and Chee, Kok Cheah and Abdul Hamid, Baharom. (2011). Budget deficits and inflation in thirteen Asian developing countries. International Journal of Business and Social Science, 2 (9). pp. 192-204.
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