Effects of Inflation Threshold On Economic Growth In North African Countries.

Almosabbeh, Imadeddin Ahmed; Albagoury, Samar H.

doi:10.33899/tanra.2023.180488.1268

	Effects of Inflation Threshold On Economic Growth In North African Countries.
TANMIYAT AL-RAFIDAIN
Volume 42, Issue 139, September 2023, Pages 278-294 PDF (706.11 K)
Document Type: Research Paper
DOI: 10.33899/tanra.2023.180488.1268
Authors
Imadeddin Ahmed Almosabbeh^* ¹; Samar H. Albagoury²
¹Arab East Colleges, Al Qirawan, Riyadh, Saudi Arabia
²Faculty of Higher African Studies, Cairo University , Cairo, Egypt
Abstract
This study aims to investigate the existence of a non-linear relationship between economic growth and inflation in a group of North African countries (Egypt, Tunisia, Algeria, and Morocco), in addition to estimating the inflation threshold in these economies, which are very similar in their productive structures, and sufficient and related data are available for them. The study used panel data for the period 1970-2021, obtained from the World Bank database published on the Internet. Methodologically, a discrete threshold estimation method was used, which estimates this threshold using the fixed-effects method. The results showed that a non-linear relationship could be captured between economic growth and inflation in these countries combined, and it was found that there is only one threshold for inflation. The inflation-growth threshold was estimated at 14.153%. The relationship between inflation and growth will be positive if inflation is below the threshold and inverse if inflation is above the threshold. The study recommends that economic policymakers in these countries follow monetary and fiscal policies that lead to the inflation rates not moving away from the estimated threshold.
Keywords
Inflation; Threshold Effects; Economic Growth; North African Economies; Fixed Effects Models. JEL: E31; C24; C23

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