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:: year 9, Issue 27 (Spring 2016) ::
JMBR 2016, 9(27): 83-108 Back to browse issues page
Political Stability and Inflation Rate Nexus in Selected MENA Countries
Hassan Heidari1, Rana Asghari *1, Roghayyeh Alinejad1
1- urmia university
Abstract:   (2254 Views)

The present study investigates the potential threshold effects in the relationship between political stability index and inflation rate for 16 countries from MENA countries with presence of other variables, including GDP growth, government consumption expenditures growth, liquidity and openness index over the period 1996-2014. For this purpose, the paper uses the Panel Smooth Transition Regression (PSTR) model. The estimation results of model reject the linearity hypothesis, and estimate a continuous transition function with two regimes that gives a threshold at political stability of 0.756 for under review countries. Moreover the study results indicate political stability index, GDP growth and openness index have a negative impact on inflation rate that their impacts are increased in the values above a threshold is calculated for political stability. The other results indicate that the influencing coefficients of the government consumption expenditures growth and liquidity variables are positive and significant in two regimes. Though, their impacts are declined in second regime. In general, the results of this study confirm the results of many done studies about positive effects of government consumption expenditure growth and liquidity and also negative effects of political stability index, GDP growth and openness index on inflation rate.

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Type of Study: Methodological Article | Subject: Macroeconomics: Consumption, Saving, Production, Employment, and Investment (E2)
Received: 2015/11/8 | Accepted: 2017/01/4 | Published: 2017/05/22
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year 9, Issue 27 (Spring 2016) Back to browse issues page
فصلنامه پژوهش‌های پولی-بانکی Journal of Monetary & Banking Research
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