Author(s)

Jiahui Wu and Rong Chen

Corresponding Author

Rong Chen

Abstract

Based on the provincial panel data from 30 provinces in China from 1997 to 2018, the article empirically tests the impact of inflation on economic growth by using the panel threshold regression method, taking China's inflation rate as the threshold variable and the core explanatory variable. The results show that China's inflation rate has a "single threshold effect" on economic growth, with a threshold value of 2.9%, there is a non-linear relationship between China's inflation rate and economic growth. There is a negative correlation between economic growth and inflation when inflation is below the threshold, and there is a significant positive correlation between growth and inflation when the inflation rate is above the threshold.

Keywords

Inflation; Economic Growth; Panel Threshold Model; Non-linear Relationship