Email this article The accomondation hypothesis in Greece: a tri-variate granger-causality aproach
Abstract
This paper with title "The Accommodation Hypothesis in Greece. A tri-variate Granger-Causality
Approach" investigates empirically the causal relationship between money growth, budget deficits and
inflation in Greece employing a tri-variate error-correction model. The causal relationship between
money, deficits and inflation is explored using three alternative definitions for money: high-powered, M l
and M2 definitions of money stock. The results support the accommodation hypothesis and provide
evidence that deficits are inflationary when monetized.
Approach" investigates empirically the causal relationship between money growth, budget deficits and
inflation in Greece employing a tri-variate error-correction model. The causal relationship between
money, deficits and inflation is explored using three alternative definitions for money: high-powered, M l
and M2 definitions of money stock. The results support the accommodation hypothesis and provide
evidence that deficits are inflationary when monetized.
Keywords
Economic growth; Budgetary expenditure
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