Abstract
This study analyses the linkage among inflation, inflation uncertainty andeconomic growth for Pakistan using annual time series over the period
of 1972-2012. The conditional volatility of inflation is captured by ARCH
model and asymmetry of shocks is captured through EGARCH model. The
results show that negative shocks to error term have larger impact on variance of inflation than positive shocks. The results of Granger Causality revealed that inflation Granger causes output growth negatively and output
growth Granger causes inflation uncertainty positively. In order to achieve
and maintain a reasonablegrowth rate, government of Pakistan must pay
proper attention to achieve price stability in the country.
Khalil Ahmad1, Sumaira Khalil2 , , Uzma Riaz. (2013) Inflation, Inflation Uncertainty and Economic Growth Nexus in Pakistan: A Granger Causality Test, International Journal of Management Research and Emerging Sciences, Volume 3, Issue 1.
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