Investigation causality tests between Inflation and Productivity

The aim of Causality tests is using econometric science to prove: First, there is relationship between two main variables of research or not, Second, what is the direction of the relationship. According to doing this tests investigate the relationship between inflation and productivity in OIC members in the period between 1998 and 2010 using panel Granger causality model. Investigation of relationship between inflation and productivity has been widely studied in recent decades. Due to high inflation rates in the Organization of Islamic Conference (OIC) members in the past years and the main role of productivity in economic growth, this subject has gained particular importance in the economies of OIC members. The results of Granger, Sims, and Toda-Yamamoto causality tests indicated that the correlation between inflation and productivity is one-directional, from inflation towards productivity.JEL Classification Numbers: C1, E31, J24

Keywords:

causality tests , Inflation , Productivity