How Do Monetary And Fiscal Determinants Affect Inflation? Evidence From Panel Data Analysis
Abstract
The article evaluates the effects of key macroeconomic indicators on inflation using panel analysis. Based on data from 14 countries with varying income levels over 2000-2021, both the Fixed Effects Model and the Generalized Method of Moments (GMM) were applied and compared. The findings show that money supply has an insignificant effect on inflation. When monetary policy is ineffective, fiscal measures become more important. According to the GMM model, the minimum wage reduces inflation, while its version adjusted for purchasing power parity increases it. Unemployment strongly influences inflation, supporting the Phillips curve that links lower unemployment to higher inflation.
Fields of Study & Subjects
Monetary Policy and Economic Impact
Fiscal Policy and Economic Growth
Economic Growth and Development
Publication details
- Journal / source
- WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS
- Publisher
- World Scientific and Engineering Academy and Society (WSEAS)
- Volume
- 23
- Pages
- 1074–1074
- Publication date
- 20 July 2026
- Language
- EN