IMPACT OF GOVERNMENT SPENDING ON INFLATION IN ASIAN EMERGING ECONOMIES: EVIDENCE FROM INDIA, CHINA, AND INDONESIA

Tai Dang Nguyen

    Research output: Contribution to journalArticle

    Abstract

    This paper investigates the long-run and short-run impacts of government spending on inflation in three Asian emerging economies of India, China and Indonesia by applying the cointegration and Vector Error Correction Model to time series data from 1970 to 2010. The results confirm a cointegrating causal link between government spending and inflation in the long run in these countries, regardless of their institutional governance differences. In the short run, government spending (as a percentage of GDP) appears to have a negative impact on inflation in China, while a positive impact in Indonesia and India. The implication is that governments of emerging economies should be prudent with their decisions on government spending.
    Original languageEnglish
    Pages (from-to)1171-1200
    JournalSingapore Economic Review
    Volume64
    Issue number5
    DOIs
    Publication statusPublished - 2019

    Fingerprint

    Dive into the research topics of 'IMPACT OF GOVERNMENT SPENDING ON INFLATION IN ASIAN EMERGING ECONOMIES: EVIDENCE FROM INDIA, CHINA, AND INDONESIA'. Together they form a unique fingerprint.

    Cite this