Inflación y crecimiento económico en México:una relación no lineal

Today that Banco de México has adopted an inflation targeting scheme, it has become more relevant to know the effect that moderate inflation has on economic growth in order to design monetary policy. The purpose of this paper is to estimate that effect following a non-lineal approach similar to that proposed by Sarel (1996). The results are consistent with the findings of Sarel (1996) and Judson y Orphanides (1996), and show that economic growth in Mexico might increase with higher rates of inflation as long as they are lower than 8.1%; inflation rates above that threshold damage severely the pace of economic expansion. In light of these findings, monetary policies aiming at very low rates of inflation may not be optimal, given the excessive costs they could imply in terms of economic growth. These results, however, should be interpreted with caution given the inherent limitations of this methodology.