IVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM THE HAGUE THE NETHERLANDS VIETNAM -NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS HE IMPACT OF INFLATION ON ECONOMIC GROWTH: EVIDENCE FROM A PANEL OF SELECTED ASIA COUNTRIES A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By VU DOAN THANH TIEN Academic Supervisor: Dr LE CONG TRU HO CHI MINH CITY, AUGUST 2012 -. - - - DECLARATION "I certify that the substance of this thesis has not already been submitted for any degree and have not been currently submitted for any other degree I certify that to the best of my knowledge and help received in preparing this thesis and all sources used have been acknowledged in this thesis." ii ACKNOWLEDGEMENTS The first person I would like to send special thanks to is my supervisor- Dr Le Cong Tru I'm grateful not solely his help throughout the thesis process, but also enthusiasm and many lessons in an attempt to improve my knowledge and skills as well He is usually ready to assist me anytime, although he is bustling The professor often keeps track of my work and motivates me to finish the duty To gain the result today, I cannot miss out his contributions Thanks so much, Dr.Tru! Next, I'm happy to thank to Dr Hoai, Dr Ngai, and Dr Nam They tried their best to help me select an appropriate topic for my thesis When I confront to issues, they supported to find the solution and give advice in hope that I might overcome the problems Besides, I also thank to the other professors ofVNP for lectures and precious materials At the same time, I also send thanks to VNP officials, especially Ms Hong They are very nice in helping me when having troubles They inform exactly and quickly to students I enjoy their enthusiasm Additionally, I also send thanks to Mr Quy - a librarian He is nice to his ; duty I'm always welcomed by him Last but not least, I cannot forget sending thanks to my family and friends I'm very grateful them to take care of and encourage me while performing the thesis Not only they support for finance, but also for mental I always keep in mind devotion and sacrifice of all Thanks so much for everything!!! iii TABLE OF CONTENTS TABLE OF CONTENTS IV LIST OF FIGURES VII LIST F TABLES VIII ABSTRA.CT CHAPTER INTRODUCTION 1.1 PROBLEM STATEMENT 1.2 RESEARCH OBJECTIVES AND RESEARCH QUESTIONS 1.3 STRUCTURE OF THE PAPER CHAPTER LITERATURE REVIEW • 2.1 THEORIES RELATED TO INFLATION AND GROWTH 2.1.1 Classical Theory 2.1.2 Neo-Classical Theory 2.1.3 Endogenous Theory 10 2.1.4 Keynesian Theory 10 2.1.5 Nee-Keynesian Theory 11 2.1.6 Monetarist Theory 11 2.2 GROWTH MODELS 12 2.2.1 The Basic Growth Model 13 2.2.2 Solow Model 13 2.2.3 Augmented Solow Model 14 2.3 VARIABLE DEFINITION 15 2.3.1 Growth Rate 15 2.3.2 Inflation l6 2.3.3 Cost of Inflation • 17 2.3.4 Control Variables IS 2.3.5 Threshold Concept 21 iv 2.4 EMPIRICAL STUDIES 21 2.4.1 The Studies of 1960s-1980s 22 2.4.2 The Studies of 1990s 23 2.4.3 Recent Studies : 26 CHAPTER 31 ECONOMIC OUTLOOKS OF STUDIED COUNTRIES 31 3.1 Economic Outlook of Vietnam 32 3.2 Economic Outlook of Philippines 34 3.3 Economic Outlook of Malaysia 36 3.4 Economic Outlook oflndonesia 39 3.5 Economic Outlook ofThailand 42 3.6 Economic Outlook ofChina 44 3.7 Economic Outlook of India 46 CHAPTER 49 MODEL SPECIFICATION & RESEARCH METHODOLOGY 49 4.1 EMPIRICAL MODEL 49 4.2 MODEL SPECIFICATION 50 4.2.1 Non-Linear Inflation-Growth Relationship 50 4.2.2 Testing Thresholds in the Inflation-Growth Relationship 51 4.3 DATA 52 4.4 RESEARCH METHODS 53 CHAPTER 57 EMPIRICAL RESULTS ~ 57 5.1 DESCRIPTIVE ANALYSIS 57 5.1.1 China 57 5.1.2 India 60 5.1.3 Indonesia 62 5.1.4 Malaysia 64 5.1 Philippines 66 5.1.6 Thailand 68 5.1.7 Vietnam 70 5.2 REGRESSION ANALYSIS 72 5.2.1 China 75 v 5.2.2 India 75 5.2.3 Indonesia 76 5.2.4 Malaysia 76 5.2.5 Philippines , 77 5.2.6 Thailand 78 5.2 Vietnam 78 5.3 INFLATION THRESHOLD ANALYSIS 79 5.3.1 Threshold Results ofChina 79 5.3.2 Threshold results oflndia 80 5.3 Threshold results of Indonesia 81 5.3.4 Threshold Results ofMalaysia 82 5.3.5 Threshold Results of Philippines 84 5.3.6 Threshold Results of Thailand 85 5.3 Threshold Results ofVietnam 87 CHAPTER 89 CONCLUSIONS, POLICY RECOMMENDATION, LIMITATIONS AND FUTHER STUDY 89 6.1 CONCLUSIONS 89 6.2 POLICY RECOMMENDATIONS 90 6.3 LIMITATIONS 92 6.4 FURTHER STUDY 92 REFERENCES 93 APPEND IX A··················!'····························································································· 99 APPENDIX B 101 APPEND IX C 107 APPENDIX » .113 vi LIST OF FIGURES Figure 2-1: Analysis framework for the impact of inflation on growth and thresholds remained in the relationship 30 Figure 3-1 A comparison between inflation and growth rate ofVietnam from 1990-2010 33 Figure 3-2: A comparison of inflation-growth relationship of Philippines from 1990 to 2010 : 35 Figure 3-3 A comparison between inflation and growth rate of Malaysia in the period of years 1990-2010 38 Figure 3-4: A comparison between inflation and economic growth of Indonesia from 1990-2010 41 Figure 3-5: A benchmark between inflation and gro\\>1h of Thailand in the years of 1990-2010 43 Figure 3-6: A comparison between inflation and growth rate of China from 1990-2010 45 Figure 3-7: A comparison between inflation and economic growth rates of India in the period 1990-2010 47 Vll LIST OF TABLES Table 2-1 Summary of the papers with thresholds found in the inflation-growth correlation 27 Table 4-1 Summary variables used in the models 52 Table 5-l Correlation matrix between variables (China) 58 Table 5-2: Summary Descriptive Statistics (China) 59 Table 5-3: Correlation matrix between variables (India) 60 Table 5-4: Summary Descriptive Statistics (India) 61 Table 5-7: Correlation matrix between variables (Malaysia) 64 Table 5-9: Correlation matrix between variables (Philippines) 66 Table 5-10: Summary Descriptive Statistics (Philippines) 67 Table 5-11: Correlation matrix between variables (Thailand 68 Table 5-13: Correlation matrix between variables (Vietnam) 70 Table 5-15 Regression Results with Fixed Effects Method 73 Table 5-16: Estimation Thresholds ofChina 80 Table 5-17: Estimation Thresholds of India 81 Table 5-18: Estimation Thresholds oflndonesia 82 Table 5-19: Estimation Thresholds ofMalaysia - 83 Table 5-20: Estimation Thresholds ofPhilippines , 85 Table 5-21: Estimation Thresholds of Thailand 86 Table 5-22: Estimation Thresholds ofVietnam 87 Vlll The Impact of Inflation on Economic Growth: Evidence from a Panel of Selected Asia Countries ABSTRACT The objective of this paper is to ascertain whether inflation significantly impacts on economic growth for the selected Asia countries The study relied on macroeconomic theories, the augmented Solow model, and empirical studies for seeking the key variables impacting growth Simultaneously the quadratic model is employed to find out the impacts of inflation on growth, using a panel data of seven Asian countries in the period of 1990-2010 The fixed-effect method was used for capturing the differences among the selected countries The results show that only China, India, Thailand, and Vietnam have a negative effect of inflation on growth, and among the countries, Thailand and Vietnam have statistically significant meaning at 1% and 5% Meanwhile the rest of countries comprising Indonesia, Malaysia and Philippines contain the positive effect of inflation on growth Except for Malaysia, Indonesia and Philippines have statistically significant meaning at 5% For estimating thresholds for the countries, the paper adopted several methods including scatter diagrams, observing average inflation rates and the method of Khan and Senhadji The outputs indicate that only India has the threshold at 7% and statistically significant meaning at 5% The rest of countries including China, Indonesia, Malaysia, Philippines, Thailand and Vietnam also find out the levels of threshold in the relationship between inflation and economic growth are 6%, 12-13%, 4%, 10-13%, 4.2-4.5% and 8%; however, all are not statistically significant meaning Y _CH vs INF_CH"2 16 14 12 o, >- 10 0 0 oo - 6- Q ~ 5- oO 4- 0 3- 2 ;; 10 12 14 INF ID Figure B-6: Scatter diagram expressing the correlation between squared- inflation and growth India 105 Y - IN vs INF- IN"2 12 z >- -4 -I -8 -12 -16 10 20 30 40 50 60 INF- IN ; Figure B-7: Scatter diagram expressing the correlation between squared- inflation and growth Indonesia 106 APPENDIXC The results of examining Heteroscedasticity by White test approach for each country Table C-1: The result tests Heteroscedastiscity with White test method of Thailand Table White Heteroskedasticity Test: F-statistic Obs*R-sguared ;; 12.68475 16.81068 Probability Probability 0.075400 0.266407 Test Equation: Dependent Variable: RESID"2 Method: Least Squares Date: 02/01/12 Time: 15:02 Sample: 1990 2008 Included observations: 17 Excluded observations: Variable Coefficient Std Error t-Statistic Prob c -1106.962 0.892736 0.015712 2.846262 -0.062387 5103.543 -4838.174 -41.18276 1.670383 -0.607850 0.005334 -0.322935 -0.124924 -0.937344 0.101637 669.3722 0.159763 0.035461 1.470636 0.025422 2801.541 2666.464 19.65958 0.925283 0.445166 0.004879 0.090055 0.034131 0.285909 0.028945 -1.653732 5.587863 0.443074 1.935395 -2.454079 1.821691 -1.814453 -2.094794 1.805268 -1.365446 1.093212 -3.585999 -3.660101 -3.278473 3.511450 0.2400 0.0306 0.7010 0.1926 0.1336 0.2101 0.2113 0.1712 0.2128 0.3054 0.3884 0.0697 0.0672 0.0818 0.0724 INF_TH INF_TH"2 INV_TH INV_TH"2 EMPL_TH EMPL_TH"2 GOV_TH GOV_TH"2 SCH_TH SCH_TH"2 TFP_TH TFP_TH"2 EX_TH EX TH'2 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.988863 0.910906 0.451694 0.408055 7.579356 3.572253 Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob( F-statistic) 107 0.756877 1.513287 0.873017 1.608205 12.68475 0.075400 Table C-2: The result tests Heteroscedastiscity with White test method of Philippines White Heteroskedasticit:l Test: F-statistic Obs*R-squared 0.222935 9.178033 Probability Probability 0.979072 0.819479 Test Equation: Dependent Variable: RESID"2 Method: Least Squares Date: 02/01/12 Time: 15:18 Sample: 1990 2008 Included observations: 18 Excluded observations: ;; Variable Coefficient Std Error t-Statistic Pro b c -759.6039 0.123119 -0.007575 -0.037351 -0.005412 -1.698678 0.010301 4355.317 -5804.171 2.827965 -0.130491 0.226112 0.051447 -0.047382 -0.038647 8385.263 0.626957 0.035201 2.604817 0.060866 13.41877 0.084279 45545.25 59570.86 24.87968 1.098030 1.238332 0.159855 0.720372 0.076908 -0.090588 0.196375 -0.215185 -0.014339 -0.088921 -0.126590 0.122230 0.095626 -0.097433 0.113666 -0.118841 0.182594 0.321832 -0.065774 -0.502507 0.9335 0.8569 0.8434 0.9895 0.9347 0.9073 0.9104 0.9298 0.9285 0.9167 0.9129 0.8668 0.7687 0.9517 0.6499 INF_PH INF_PH"2 INV_PH INV_PH 11 SCH_PH SCH_PH"2 EMPL_PH EMPL_PH"2 GOV_PH GOV_PH"2 EX_PH EX_PH"2 TFP_PH TFP PH"2 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.509891 -1.777286 1.086543 3.541728 -10.90908 2.906578 Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob{ F-statistic} 108 0.364679 0.651984 2.878787 3.620763 0.222935 0.979072 Table C-3: The result tests Heteroscedastiscity with White test method of Malaysia White Heteroskedastici~ F-statistic Obs*R-sguared • Test: 4.431385 15.74619 Probability Probability 0.357916 0.329119 Test Equation: Dependent Variable: RESID 11 Method: Least Squares Time: 15:31 Date: 02/01/12 Sample: 1990 2008 Included observations: 16 Excluded observations: Variable Coefficient Std Error t-Statistic Prob c 1052.606 -0.018331 -0.004319 0.043061 -0.000107 -0.558965 0.003274 -5727.242 7558.738 8.339727 -0.334643 -0.022832 0.005692 -0.024184 0.009137 394.3614 0.374507 0.044982 0.312770 0.005244 0.522908 0.003498 2214.507 2931.354 5.980264 0.242028 0.077944 0.003645 0.049908 0.009175 2.669141 -0.048947 -0.096017 0.137676 -0.020411 -1.068954 0.935829 -2.586238 2.578583 1.394542 -1.382663 -0.292932 1.561483 -0.484575 0.995879 0.2282 0.9689 0.9391 0.9129 0.9870 0.4788 0.5211 0.2349 0.2355 0.3960 0.3986 0.8186 0.3626 0.7127 0.5013 INF_MA INF_MA112 INV_MA INV_MA11 SCH_MA SCH_MN2 EMPL_MA EMPL_MA11 GOV_MA GOV_MA112 EX_MA EX_MN2 TFP_MA TFP MN2 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.984137 0.762054 0.102968 0.010602 35.85104 2.742301 Mean dependent var 0.162439 S.D dependentvar 0.211088 Akaike info criterion -2.606380 Schwarz criterion -1.882078 F-statistic 4.431385 0.357916 Prob{F-statistic} Table C-4: The result tests Heteroscedastiscity with White test method of Indonesia White Heteroskedastici~ F-statistic Obs*R-sguared Test: 2.324731 16.01581 Probability Probability Test Equation: Dependent Variable: RESID11 Method: Least Squares Date: 02/01/12 Time: 15:52 109 0.341281 0.312410 Sample: 1990 2008 Included observations: 17 Excluded observations: Variable Coefficient Std Error t-Statistic Pro b c 254.2346 -1.962018 0.108018 1.460292 -0.023692 12.30396 -0.843977 -1544.441 1847.124 0.395172 -0.003534 0.353916 -0.046557 -0.384118 0.091922 1000.408 1.514197 0.083816 1.791008 0.030192 10.09952 0.701936 4878.242 5662.429 0.555308 0.004653 0.625711 0.067871 0.626329 0.245173 0.254131 -1.295748 1.288757 0.815346 -0.784725 1.218272 -1.202357 -0.316598 0.326207 0.711627 -0.759452 0.565622 -0.685959 -0.613285 0.374928 0.8231 0.3244 0.3264 0.5005 0.5148 0.3473 0.3523 0.7815 0.7752 0.5505 0.5269 0.6286 0.5636 0.6021 0.7437 INF_IN INF_IN"2 INV_IN INV_IN"2 GOV_IN GOV_IN"2 EMPL_IN EMPL_IN"2 SCH_IN SCH_IN"2 EX_IN EX_IN"2 TFP_IN TFP IN"2 0.942107 0.536852 0.342597 0.234745 12.27902 3.042164 R-squared Adjusted _R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob(F -statistic) 0.395400 0.503412 0.320115 1.055304 2.324731 0.341281 • Table C-5: The result tests Heteroscedastiscity with White test method of India White Heteroskedastici~ Obs*R-sguared Test: 15.00000 Probability 0.378155 Test Equation: Dependent Variable: RESID"2 Method: Least Squares Date: 02/01/12 Time: 16:06 Sample: 1993 2008 Included observations: 15 Excluded observations: i Variable Coefficient Std Error t-Statistic Prob c -35390.59 80.49248 -5.058527 -0.867744 0.125830 241064.2 -313342.5 -412.0828 4.466731 -296.4661 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA INF_ID INF_ID"2 INV_ID INV_ID"2 EMPL_ID EMPL_ID"2 SCH_ID SCH_ID"2 GOV_ID 110 GOV_ID 112 EX_ID EX_ID 112 TFP_ID TFP ID11 R-squared S.D dependentvar Sum squared resid Log likelihood 12.61879 -1.728005 -20.04616 -7.671974 0.224411 1.000000 2.112694 1.22E-10 170.2143 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA Mean dependent var · 0.885253 Akaike info criterion -20.69524 Schwarz criterion -19.98719 Durbin-Watson stat 3.004914 Table C-6: The result tests Heteroscedastiscity with White test method of China White Heteroskedasticity Test: F-statistic Obs*R-squared • i 844.3850 15.99865 Probability Probability 0.026967 0.313457 Test Equation: Dependent Variable: RESID 11 Method: Least Squares Time: 10:56 Date: 02/01/12 Sample: 1990 2008 Included observations: 16 Excluded observations: Variable Coefficient Std Error t-Statistic Pro b c 4437.751 -15626.87 13859.89 -0.890554 0.042557 2.683083 -0.122188 -0.028970 0.003763 -0.629147 0.000168 -0.732171 0.006251 0.172993 -0.033970 620.1885 2199.069 1954.478 0.065356 0.002607 1.182910 0.040287 0.021476 0.000836 0.435729 0.005164 0.115868 0.001104 0.010228 0.000741 7.155487 -7.106129 7.09"1353 -13.62617 16.32424 2.268205 -3.032961 -1.348964 4.499607 -1.443894 0.032524 -6.318981 5.659400 16.91393 -45.85239 0.0884 0.0890 0.0892 0.0466 0.0389 0.2644 0.2028 0.4061 0.1392 0.3856 0.9793 0.0999 0.1113 0.0376 0.0139 EMPL_CH EMPL_CH 112 EX_CH EX_CH 112 GOV_CH GOV_CH"·2 INF_CH INF_CH 112 INV_CH INV_CW2 SCH_CH SCH_CH 112 TFP_CH TFP_CH 11 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood 0.999915 0.998731 0.025408 0.000646 58.24059 Mean dependent var 0.418451 0.713316 S.D dependentvar Akaike info criterion -5.405073 Schwarz criterion -4.680771 844.3850 F-statistic Ill Durbin-Watson stat 3.897552 Prob( F-statistic) 0.026967 Probability Probability 0.704401 0.474680 White Heteroskedasticity Test: • F-statistic Obs*R-squared 0.732514 13.66861 Test Equation: Dependent Variable: RESID/\2 Method: Least Squares Time: 10:37 Date: 06/27/12 aSample: 1990 2008 Included observations: 19 j Variable Coefficient Std Error t-Statistic Pro b c 77.89618 -0.048242 0.000236 -0.028595 0.000280 -119.2453 105.5372 -12.06031 0.815532 -0.023581 0.000727 -0.145208 -0.010101 -0.074753 0.065998 142.0278 0.104019 0.000972 0.284121 0.005926 514.2844 513.9383 10.18756 0.667283 0.035943 0.001710 0.410892 0.016520 0.118228 0.040079 0.548457 -0.463778 0.242565 -0.100644 0.047236 -0.231866 0.205350 -1.183828 1.222168 -0.656052 0.425556 -0.353397 -0.611429 -0.632276 1.646699 0.6126 0.6669 0.8203 0.9247 0.9646 0.8280 0.8473 0.3020 0.2887 0.5476 0.6923 0.7416 0.5740 0.5615 0.1750 INF_VN INF_VN/\2 INV_VN INV_VN/\2 EMPL_VN EMPL_VN/\2 GOV_VN GOV_VN/\2 SCH_VN SCH_VN/\2 EX_VN EX_VN/\2 TFP_VN TFP_VN/\2 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.719401 -0.262697 0.438623 0.769560 3.500728 2.977541 Mean dependent var S.D.dependentvar Akaike info criterion Schwarz criterion F-statistic Prob( F-statistic) 0.318940 0.390339 1.210450 1.956059 0.732514 0.704401 Table C-7: The result tests Heteroscedastiscity with White test method of Vietnam 112 APPENDIXD The scatter diagrams present the relationship between variables in the model of the countries • 584 10 16.5 580 16.0 15.5 576 I u )(I Q .568 :I! w .:'; r 572 ()I w 564 I 15.0 ~I 14.5 " 14.0 560 13.5 -2 556 10 12 14 16 13 10 12 14 16 Y_CH Y_CH 25 20 , I ~I 44 80 42 70 40 r u 10 ;!!; ' I (/) 10 12 14 16 12 14 16 50 40 30 34 16 II (J 38 36 -5 14 60 (J >I ;!!; 12 Y_CH 15 I 10 6 Y_CH 10 Y_CH 12 14 16 10 Y_CH ,, , 10 r ~I "- 1- -5 -10 10 12 14 16 Y_CH i Figure D-1: The scatter diagrams describe the correlation between the variables in the model of China 113 ;;:I u 1- • 64 40 60 36 9I 56 ;:I J: l) (/) ~ 52 48 10 11 20 10 11 10 11 10 11 Y_ID 13.2 12 10 -1 12.4 ~ C!l 11.6 10.4 10 11 -2 w -3 -4 10.8 ~I 12.0 11.2 : ;:I , 12.8 Y_ID Y_ID 13.6 14 u Y_ID Y_ID 9I · .' 28 24 44 -2 32 10 11 -5 e Y_ID 43 42 41 :I 40 Q_ :I! w 39 38 37 36 10 11 Y_ID Figure D-2: The scatter diagrams describe the correlation between the variables in the model of India i 114 z ;;:I -4 "- -8 1- ;~ • 80~ 76 I 72 68 ~ r' u U) 64 60 56 • -12 -16 -20 -16 -12 52 48 -8 -4 44 -16 12 -8 -4 20 10~ ··' -12 -8 -4 241 "'- 20 16 -16 12 -12 -8 6.0 5.5 12 5.0 -16 z ~I w :l -2 -8 -4 Y_IN 12 -16 -12 -8 -4 Y_IN 45 I 44 z -:} II 43 ::11 w 42 41 -16 -12 -8 -4 12 -12 10 6.5 -4 12 7.5 Y_IN • ~ •o.• 8.0 ;:' 7.0 ~ -16 ;:' 28 •' 8.5 z 30 32 z Y_IN 9.0 I ~l ~· a Y_IN 3si ~ -12 Y_IN :J 40 12 Y_IN Figure D-3: The scatter diagrams describe the correlation between the variables in the model of Indonesia , ~ 115 12 < -4 :E a.' u 1- • 75 , < D :E :t:' 65 (.) D 60 < :E ~· 30 ·· -8 -4 -8 12 D 55 -20 -4 20J 5~ I .• < :E :J 13 < 12 :E >' 11 10 -4 -4 12 -8 -4 Y_MA Y_MA 12 8 25 20J 15 < ~· w 10 -8 -8 Y_MA I 141 15 12 Y_MA Y_MA D D 35 D 25 -16 u.' o rn -12 ~ ) 70 -8 45 D 12 :J -8 I • I I -4 I Y_MA 400 i 3951 390 < _.} :I! D :I! w 385~· 380 375 I .370] 385 -8 I I I I -4 12 Y_MA Figure D-4: The scatter diagrams describe the correlation between the variables in the model of Malaysia i ' 116 12 84 26 82 24 •o:• :J: c c.' 80 22 :J: c 78 :J: u "' -2 • -4 76 14 -1 14 16 13 12 :J: c u.' 11 -1 5 8 Y_PH -2 :J: c x' w -4 -6 10 12 >' (!) 4 J' -1 Y_PH 20 c 16 Y_PH ~ 18 74 20 ~ 70 -1 :J: >' 72 -6 ~ c I (.) 1- :J: -1 -12 Y_PH Y_PH -6 -10 -1 Y_PH 395 • 390 385 :J: .:IE 380 .375 IIJ 370 365 360 -1 Y_PH Figure D-5: The scatter diagrams describe the correlation between the variables in the model of Philippines i l 117 0~ ~' • "' 'j * 80 I 70 60 :I: :~:' 50 u "' 40 -10 30 • -15 -12 I -8 -4 20 -12 12 -8 -4 36 :I: ~· ~ ·: :I: ~· oi ~ -5~ 11.5 , :I: e; C> I 24 20 -12 12 -4 -8 -4 11.0 12 10.5 10.0 9.0 -12 I 10 -8 -4 • I ~· UJ 12 -51 -104 -12 I I I -8 -4 I Y_TH 55 • 54 53 , :I: -' Q :I! UJ I 52 511 - 50 49 48 -12 -8 -4 12 15 :I: Y_TH Y_TH Y_TH : 9.5 -8 20 12.0 - 5~ 32 28 I 12.5 - -10 -12 4QJ Y_TH Y_TH 10 44 12 Y_TH Figure D-6: The scatter diagrams describe the correlation between the variables in the model of Thailand iO • " 118 12 - z > a I u 44 40 20 z > J:l 0 "' ~ -10 -2 -20 6 60 7.5 50 z >I 40 u z • • - 0 "o -12 -14 -16 0 5.5 X w 6.0 I -8 >1·10 6.5 -6 @ 30 -4 > >I 7.0 -2 8.0 -18 Y_VN Y_VN Y_VN 58 58 54 ~I -' a :1 w 52 50 48 46 ,o 44 Y_VN 8.5 70 10 Y_VN 80 20 16 Y_VN ~ 24 12 32 20 -30 -4 z ~ >I 28 (.) -3 I 36 10 -1 -I •, 30 Y_VN Figure D-7: The scatter diagrams describe the correlation between the variables in the model of Vietnam 119 ... of Inflation on Economic Growth: Evidence from a Panel of Selected Asia Countries ABSTRACT The objective of this paper is to ascertain whether inflation significantly impacts on economic growth. .. differences among the selected countries The results show that only China, India, Thailand, and Vietnam have a negative effect of inflation on growth, and among the countries, Thailand and Vietnam have... (Me Taggart et al., 1996) The neoclassical theory theorizes that capital accumulation is a motivation of the economic growth • Labour force is the participation rate of labours in the economy According