Considering the effect of inflation on financial development and economic\ngrowth, in this paper we investigate the role of inflation in the effect of financial\ndevelopment on the economic growth in OPEC economies for the period\nof 1970 to 2015. For this purpose, we used Panel Smooth Threshold Regression\n(PSTR) to estimate nonlinear effects of inflation in the relation between\neconomic growth and financial development. The results of estimation show\nthat the thresholds of inflation rate were 20.33 and 20.36 considering the two\ndifferent proxies of financial development (domestic credit provided by banking\nand domestic credit to private sector). The results of nonlinear estimation\nshowed that in over-threshold inflations, the effect of financial development\non the economic growth in the OPEC economies would decrease and would\neven become negative.
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