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Investigating the relationship between inflation and economic growth in Mauritania: an empirical analysis using the regime change model

Author

Listed:
  • Amal Ben Abdallah

    (University of Sfax)

  • Sourour Guidara

    (University of Sfax)

  • Rima Aloulou

    (University of Sfax)

  • Maha Kalai

    (University of Sfax)

  • Kamel Helali

    (University of Sfax)

Abstract

This study examines the non-linear relationship between inflation and economic growth in Mauritania using the threshold regression model. The analysis covers the period from 1970 to 2018, allowing for a comprehensive assessment of the inflation–growth dynamics in the country. By employing the regime change model, we aim to identify the existence of a threshold level of inflation beyond which the relationship with economic growth changes. This approach allows us to capture potential asymmetries and non-linearities in the relationship, providing valuable insights for policymakers. In line with several previous research works, our findings indicated that there is a non-linear relationship between the consumer price index and the economic growth. This relationship was influenced by macroeconomics features. In addition, the results show a positive impact of inflation on economic growth below the threshold of 5.53%, while, above this threshold, the relationship becomes negative.

Suggested Citation

  • Amal Ben Abdallah & Sourour Guidara & Rima Aloulou & Maha Kalai & Kamel Helali, 2024. "Investigating the relationship between inflation and economic growth in Mauritania: an empirical analysis using the regime change model," SN Business & Economics, Springer, vol. 4(1), pages 1-25, January.
    • Handle: RePEc:spr:snbeco:v:4:y:2024:i:1:d:10.1007_s43546-023-00599-x
    DOI: 10.1007/s43546-023-00599-x
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    More about this item

    Keywords

    Inflation; Economic growth; Threshold regression; Developing country;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E29 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Other
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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