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Does intelligence help fighting inflation: an empirical test?

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  • Salahodjaev, Raufhon

Abstract

This article empirically investigates the effect of intelligence on inflation, using data from 122 countries, over the period 1990 – 2013. The findings suggest strong evidence for the hypothesis that intelligence is negatively linked to inflation. This paper documents that on average, when national IQ increases from the level of El Salvador (78 points) to that of Malaysia (91.7 points), the long run inflation decreases by 27 percent. In particular, the negative effect of intelligence on inflation is stronger in countries with low levels of democracy. The negative impact of national IQ remains robust when controlled for potential determinants of inflation.

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  • Salahodjaev, Raufhon, 2015. "Does intelligence help fighting inflation: an empirical test?," MPRA Paper 66882, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:66882
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    More about this item

    Keywords

    inflation; IQ; intelligence; democracy; cross-country;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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