ANALYSIS OF THE EFFECTS OF INFLATION ON ECONOMIC GROWTH IN SERBIA - VECTOR AUTOREGRESSION MODEL
DOI:
https://doi.org/10.7251/ZREFIS1206063MKeywords:
inflation, economic growth, negative effects, model of vector autoregressionAbstract
An analysis of the relations between inflation and economic growth marked the period of the second half of the 20th century. It is well known that the relationship between inflation and economic growth is one of the crucial relationships in macroeconomics, making the study of this phenomenon a matter of interest. A number of empirical studies carried out since the 70s had a profound effect on the analysis of the effects of inflation, and have been intensively researching the effects of inflation on economic growth. The results of the most significant empirical findings have pointed to the negative connotation of the effect of inflation on economic growth. The final consensus among economists about the relationship of inflation and economic growth has yet to be reached. This paper deals with the empirical analysis of the effects of inflation on economic growth in Serbia. The method of vector autoregression used to analyze these effects has provided the data which indicate a decline in industrial production of approximately 0.23 %, provided inflation increases by 1 %. Regardless of the small intensity of this effect, it is still negative and statistically significant.References
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