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The steady inflation rate of economic growth

CollectionsANU Centre for Economic Policy Research (CEPR)
Title: The steady inflation rate of economic growth
Author(s): Dungey, Mardi
Pitchford, John
Keywords: inflation
growth
import prices
monetary policy
Publisher: Canberra, ACT: Centre for Economic Policy Research (CEPR), The Australian National University
Series/Report no.: Discussion Paper (Centre for Economic Policy Research (CEPR), The Australian National University): No. 414
Description: 
This paper considers the existence of a path of GDP corresponding to steady inflation in the prices of domestic goods. We estimate the steady inflation rate of growth, denoted the SIRG, at a little over 4 per cent per annum in the post-float period. Changes in inflation are modelled as a nonlinear combination of growth and changes in import price inflation. Because import price inflation is more volatile than overall inflation, policy that targets overall inflation may require growth to fluctuate considerably, whereas growth can be steady if the target is steady inflation of domestic goods’ prices.
URI: http://hdl.handle.net/1885/40220
ISBN: 0 7315 2278 8
ISSN: 1442-8636

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