Discussion Paper
No. 2013-1 |
January 07, 2013
Inflation, Inflation Uncertainty and Output in Tunisia
(Published in Economic Perspectives Challenging Financialization, Inequality and Crises)
Abstract
This study investigates the relationship between inflation, inflation uncertainty and output in Tunisia using real and nominal data. GARCH-in-mean model with lagged variance equation is employed for the analysis. The result shows that inflation uncertainty has a positive and significant effect on the level of inflation only in the real term. Moreover, inflation uncertainty Granger-causes inflation and economic growth respectively. These results have important implications for the monetary policy in Tunisia.Paper submitted to the special issue Economic Perspectives Challenging Financialization, Inequality and Crises
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