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Inflation and economic growth in Sri Lanka: an ARDL bound testing approach

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dc.contributor.author Aslam, A.L. Mohamed
dc.contributor.author Lebbe, S.M. Ahamed
dc.date.accessioned 2017-01-29T10:54:27Z
dc.date.available 2017-01-29T10:54:27Z
dc.date.issued 2017-01-17
dc.identifier.citation 5th South Eastern University Arts Research Session 2016 on "Research and Development for a Global Knowledge Society". 17 January 2017. South Eastern University of Sri Lanka, Oluvil, Sri Lanka, pp. 58-63. en_US
dc.identifier.isbn 978-955-627-100-3
dc.identifier.uri http://ir.lib.seu.ac.lk/handle/123456789/2185
dc.description.abstract Nowadays, number of researchers empirically confirmed that the inflation and economic growth equally move together in negative liaison. But, in Sri Lankan context, this relationship was inferentially not proofed. Therefore, this study was empirically going to test this relationship. The objective of this study was to test the long run nexus between the inflation and economic growth in Sri Lanka. To test this objective, this study used the annual time series data during the periods of 1970 to 2014. And, the multiple regressions model was employed with support of the Auto Regressive Distributed Lag (ARDL) technique which was newly introduced by Pesaran et al., (2001). In this study, the economic growth was used as dependent variable and the inflation rate, exchange rate, and money supply were considered as independent variables. In these independent variables, the inflation rate was considered as key variable and others were exercised as control variables. Based on the ARDL technique, this study selected the lag- 2 model for interpreting the findings which was selected by Akaike Info Criterion (AIC) and Schwarz Bayesian Criterion (SBC). Furthermore, this study fitted a long run nexus model using ordinary least square method with support of ARDL technique. Based on this model, this study confirmed that both the inflation and the economic growth maintain the long run nexus between them with appearing of negative sign. Therefore, this study recommends that, when the development policy makers frame the development policy they should consider this nexus. en_US
dc.language.iso en_US en_US
dc.publisher Faculty of Arts & Culture, South Eastern University of Sri Lanka en_US
dc.subject Inflation rate en_US
dc.subject Exchange rate en_US
dc.subject Broad money en_US
dc.subject Economic growth en_US
dc.title Inflation and economic growth in Sri Lanka: an ARDL bound testing approach en_US
dc.type Article en_US


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  • SEUARS 2016 [90]
    South Eastern University Arts Research Session - 2016

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