Abstract:
We examine the relationship between money supply growth and inflation in 3 Asian Economies which are India, Malaysia and Japan using a time-frequency approach. The application of a unified multi-scale analysis allows us to provide a continuous assessment of the link between money supply growth and inflation, unlike most of the existing literature studying this relationship. We also employ a bivariate frequency-domain causality test to determine the nature and direction of interdependence between money supply growth and inflation dynamics. Our findings provide a better understanding of their lead-lag linkages and causal relationship in the selected countries of the Asia-Pacific region.
Acknowledgments
Stelios Bekiros has received funding from the EU Horizon 2020 research and innovation programme under the MS-C Grant No 656136. Gazi Salah Uddin is thankful for the financial support of Jan Wallanders and Tom Hedelius Foundation. We would like to thank the Editor Bruce Mizrach for his valuable remarks. Moreover, we would like to express our gratitude for the extensive and insightful comments made by the anonymous referee that helped us improve our work considerably.
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