IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v29y1990i1p19-32.html
   My bibliography  Save this article

The Monetarist versus the Neo-Keynesian Views on the Acceleration of Inflation: Some Evidence from South Asian Countries (with Special Emphasis on Pakistan)

Author

Listed:
  • Akhtar Hossain

    (Newcastle University, Australia.)

Abstract

This paper tests the monetarist versus the neo-Keynesian views on the acceleration of inflation, using annual data for Bangladesh, India, Nepal, Pakistan, and Sri Lanka (mostly) for the period 1961—88, within the framework of the theoretical model of Stein (1978, 1982). The empirical results consistently support the monetarist view that changes in real money balances contribute to an acceleration of inflation. Another important finding is that except for Bangladesh, contrary to the neo-Keynesian view, bond-financed government expenditure does not have an independent significant effect on the acceleration of inflation.

Suggested Citation

  • Akhtar Hossain, 1990. "The Monetarist versus the Neo-Keynesian Views on the Acceleration of Inflation: Some Evidence from South Asian Countries (with Special Emphasis on Pakistan)," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 29(1), pages 19-32.
    • Handle: RePEc:pid:journl:v:29:y:1990:i:1:p:19-32
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/1990/Volume1/19-32.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Md. Akhtar Hossain, 1986. "Monetary Disequilibrium and Inflation. A Monetary Model of Inflation in Pakistan, 1963-82," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 25(2), pages 141-162.
    2. Stein, Jerome L., 1978. "Inflation and stagflation," Journal of Banking & Finance, Elsevier, vol. 2(2), pages 109-131, August.
    3. Karl Brunner, 1970. "The “monetarist revolution” in monetary theory," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 105(1), pages 1-30, September.
    4. JONATHAN D. JONES & NASIR M. KHIUl, 1988. "Money Growth, Inflation, and Causality (EmpiricalEvidence for Pakistan, 1973-1985)," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 27(1), pages 45-58.
    5. Stein, Jerome L., 1978. "Inflation, employment and stagflation," Journal of Monetary Economics, Elsevier, vol. 4(2), pages 193-228, April.
    6. Darrat, Ali F., 1985. "The monetarist versus the neo-Keynesian views on inflation : Some Italian evidence," Economics Letters, Elsevier, vol. 19(3), pages 237-241.
    7. Turnovsky, Stephen J & Wohar, Mark E, 1984. "Monetarism and the Aggregate Economy: Some Longer-Run Evidence," The Review of Economics and Statistics, MIT Press, vol. 66(4), pages 619-629, November.
    8. Stein, Jerome L, 1974. "Unemployment, Inflation, and Monetarism," American Economic Review, American Economic Association, vol. 64(6), pages 867-887, December.
    9. Stein, Jerome L, 1981. "Monetarist, Keynesian, and New Classical Economics," American Economic Review, American Economic Association, vol. 71(2), pages 139-144, May.
    10. Desai, Meghnad & Blake, David, 1982. "Monetarism and the US economy: A re-evaluation of Stein's model 1960-1973," Journal of Monetary Economics, Elsevier, vol. 10(1), pages 111-125, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abdul Qayyum, 2006. "Money, Inflation, and Growth in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(2), pages 203-212.
    2. Muhammad REHMAN*, 2010. "Money-Inflation Relationship: Band Spectrum Analysis Approach," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 20, pages 67-76.
    3. Khan, Safdar Ullah & Saqib, Omar Farooq, 2011. "Political instability and inflation in Pakistan," Journal of Asian Economics, Elsevier, vol. 22(6), pages 540-549.
    4. Inayat Ullah Mangla, 2011. "Reconstructing the Performance of Pakistan’s Political Economy: Another Paradigm," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(Special E), pages 30-70, September.
    5. Saira Tufail & Sadia Batool, 2013. "An Analysis of the Relationship between Inflation and Gold Prices: Evidence from Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 18(2), pages 1-35, July-Dec.
    6. Iqbal, Nasir & Khan, Sardar Javaid Iqbal & Irfan, Muhammad, 2008. "Democracy, Autocracy and Macroeconomic Performance in Pakistan," MPRA Paper 28122, University Library of Munich, Germany.
    7. Mohammad Aslam Chaudhary & Naved Ahmad, 1995. "Money Supply, Deficit, and Inflation in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 34(4), pages 945-956.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aurélien Goutsmedt, 2021. "From the Stagflation to the Great Inflation: Explaining the US economy of the 1970s," Revue d'économie politique, Dalloz, vol. 131(3), pages 557-582.
    2. Robert A. Black & Cindy Benzing, 1991. "Exchange Rates, Energy Prices, Unemployment, Money, and Inflation: A Further Test," Eastern Economic Journal, Eastern Economic Association, vol. 17(2), pages 189-197, Apr-Jun.
    3. S. Adnan & H.A.S. BUKHARI & Safdar Ullah KHAN, 2008. "Does Volatility In Government Borrowing Leads To Higher Inflation? Evidence From Pakistan," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 3(3(5)_Fall), pages 187-202.
    4. Ornela SHALARI & Fejzi KOLANECI, 2014. "Statistical analysis of the inflation in the case of Albania," EuroEconomica, Danubius University of Galati, issue 2(33), pages 67-77, November.
    5. Visser, H., 1987. "A survey of recent developments in monetary theory," Serie Research Memoranda 0003, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    6. Gemechu, Kumadebis Tamiru, 2019. "Capital Flight and Fiscal Policy in Developing Countries: Evidence from Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 28(02), October.
    7. Victor Pinga & Gerald Nelson, 2001. "Money, prices and causality: monetarist versus structuralist explanations using pooled country evidence," Applied Economics, Taylor & Francis Journals, vol. 33(10), pages 1271-1281.
    8. Stephen J. Turnovsky, 1987. "Alternative Modes of Deficit Financing and Endogenous Monetary and Fiscal Policy 1923-1982," NBER Working Papers 2123, National Bureau of Economic Research, Inc.
    9. Olga Susana M. Monteiro & Artur C. B. da Silva Lopes, 2010. "Short- and Long-Run Tests of the Expectations Hypothesis: The Portuguese Case," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(3), pages 257-280.
    10. JONATHAN D. JONES & NASIR M. KHIUl, 1988. "Money Growth, Inflation, and Causality (EmpiricalEvidence for Pakistan, 1973-1985)," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 27(1), pages 45-58.
    11. Abdul Qayyum, 2006. "Money, Inflation, and Growth in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(2), pages 203-212.
    12. Carl Chiarella & Peter Flaschel, 1995. "Keynesian Monetary Growth Dynamics: The Missing Prototype," Working Paper Series 52, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    13. Quentin Giai Gianetto & Hamdi Raïssi, 2015. "Testing Instantaneous Causality in Presence of Nonconstant Unconditional Covariance," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 33(1), pages 46-53, January.
    14. Sonja Kokotović & Miodrag Koprivica, 2016. "PMI (Public Media Institution Radio Television of Vojvodina the New Media Organization," European Journal of Interdisciplinary Studies Articles, Revistia Research and Publishing, vol. 2, ejis_v2_i.
    15. Ansari, M. I. & Ahmed, S. M., 2007. "Does money matter? Evidence from vector error-correction for Mexico," Journal of Developing Areas, Tennessee State University, College of Business, vol. 41(1), pages 185-202, September.
    16. Frey, Bruno S., 1978. "Politico-economic models and cycles," Journal of Public Economics, Elsevier, vol. 9(2), pages 203-220, April.
    17. Ansari, M. I., 1996. "Monetary vs. fiscal policy: Some evidence from vector autoregression for India," Journal of Asian Economics, Elsevier, vol. 7(4), pages 677-698.
    18. Víctor I Espinosa & David O Cueva, 2024. "The political economy of fiscal dominance: Evidence from the Chilean government of Salvador Allende," Economic Affairs, Wiley Blackwell, vol. 44(1), pages 118-138, February.
    19. Tang, Chor Foon, 2008. "Is inflation always a monetary phenomenon in Malaysia?," MPRA Paper 19778, University Library of Munich, Germany.
    20. Gebrekirstos, Kibrom & Gebreegziabher, Zenebe, 2019. "Inflation and Money Growth in Ethiopia: Is there a Threshold Effect?," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 28(02), October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:29:y:1990:i:1:p:19-32. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.