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Article
TESTING THE LINKAGES BETWEEN OUTPUT GROWTH, INFLATION AND EMPLOYMENT GROWTH: EVIDENCE FROM A PANEL VECTOR AUTOREGRESSION
Guglielmo Maria Caporale, Marinko Skare
ABSTRACT.This paper analyses the linkages between output growth, inflation and employment growth for 119 countries over the period 1970-2008 using a panel VAR approach. It shows the existence of statistically significant relationships as well as heterogeneity across countries and panels. It also reports evidence on whether or not there is a trade-off between inflation and employment, employment growth and output growth which can be exploited by policy makers.
KEYWORDS: inflation, output growth, employment growth, panel VAR, impulse response.
JEL classification: C23, E24, E31, E60.