Journal article

Authors list: Nademi, Y.; Winker, P.

Publication year: 2022

Pages: 199-214

Journal: Iranian economic review

Volume number: 26

Issue number: 1

DOI Link: https://doi.org/10.22059/ier.2022.86979

Publisher: Faculty of Economics, University of Tehran

Abstract: 

The purpose of this paper is to consider the relationship between inflation and government size in OPEC countries during the period 2000-2015. Estimation results from different linear panel models with quadratic form of government size and non-linear panel models including static and dynamic panel threshold models suggest that there is a non-linear relationship between government size and the inflation rate in these countries. The threshold value of government size is estimated as 17.76% for all the threshold panel models with different control variables. Below this threshold value, an increase in government size has a significant negative impact on the inflation rate. When government size grows larger, an increasing government size has a significant positive impact on the inflation rate. This paper suggests that it is possible to explain the contradictory evidence of previous studies by making use of a non-linear model.

Harvard Citation style: Nademi, Y. and Winker, P. (2022) Non-Linear Effects of Government Size on Inflation in OPEC Countries: A Threshold Panel Approach, Iranian economic review, 26(1), pp. 199-214. https://doi.org/10.22059/ier.2022.86979

APA Citation style: Nademi, Y., & Winker, P. (2022). Non-Linear Effects of Government Size on Inflation in OPEC Countries: A Threshold Panel Approach. Iranian economic review. 26(1), 199-214. https://doi.org/10.22059/ier.2022.86979