Threshold Effect of Inflation on Economic Growth ‎in Developed and Developing Countries, Selective ‎Approach the Panel Smooth Transition Regression ‎‎(PSTR)‎

Achieving a high and stable economic growth rate is one of the ‎important issues in each country. Influence of Inflation on ‎Economic Growth has been examined from various perspectives in ‎economic literature. These views, depending on the conditions of ‎the global economy, have suggested different views on the impact of ‎inflation on economic growth. Therefore, the purpose of this study ‎is to investigate the threshold effect of inflation on the growth of ‎developed and developing countries in the period 1995-2015. To do ‎this review, has been used a panel smooth transition regression ‎model (PSTR). Also, considering a transfer function with a ‎threshold parameter representing a two-regime model is sufficient ‎to specify the nonlinear relationship between the variables under ‎consideration. Based on the results, the threshold for inflation for ‎developed countries is 7.99 and for developing countries is 12.11. ‎On the other hand, the slope parameter (transmission velocity) is ‎also 3.11 and 0.22 in developed and developing countries, ‎respectively. The results indicate that the inflation rate in both ‎regimes (first and second regimes) has a negative effect on ‎economic growth. While in developing countries, the variable ‎inflation rate in the first-order diet has a positive effect and in the ‎second-order diet has a negative effect on economic growth.‎