Testing the Kumara Swamy Theorem of Inflationary Gap: Empirical Evidence from Canada
Journal of Financial Management and Analysis, Vol. 25, No.1, 2012
Posted: 8 Oct 2012
Date Written: 2012
This paper empirically tests the Kumara Swamy Theorem of Inflationary Gap for Canada over the period 1997-2011 and compares the results with Lazaridis and Livanis (2010) for the Greek and Cypriot economies. While this paper finds favorable results in the direction of the hypothesis, it demonstrates weak support for the postulated magnitude but concedes that there were confounding factors over the testing period. The paper concludes with suggestions for further extensive research to test the Theorem further.
Keywords: Inflationary Gap, Canada, Confounding factors
JEL Classification: C82, E31, E52, E58
Suggested Citation: Suggested Citation