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The Steady Inflation Rate of Economic Growth

journal contribution
posted on 2023-05-16, 23:41 authored by Dungey, MH, Pitchford, J
This paper considers the existence of a path of GDP corresponding to steady inflation in the prices of domestic goods. We estimate the steady inflation rate of growth, denoted the SIRG, at a little over 4 per cent p.a. in the post-float period in Australia. Changes in inflation are modelled as a nonlinear combination of growth and changes in import price inflation. Because import price inflation is more volatile than overall inflation, policy that targets overall inflation may require growth to fluctuate considerably, whereas growth can be steady if the target is steady inflation of domestic goods' prices.

History

Publication title

The Economic Record

Volume

76

Issue

235

Pagination

386-400

ISSN

0013-0249

Department/School

TSBE

Publisher

Wiley-Blackwell Publishing Asia

Place of publication

Australia

Repository Status

  • Restricted

Socio-economic Objectives

Monetary policy

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    University Of Tasmania

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