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This study examines the relationships between inflation, output growth and their uncertainties for India over the period from 1971 to 2015. The paper extends the existing empirical literature by employing a regime switching model to understand the dynamics of the above linkages in different inflation and output growth regimes of India. Our estimated results indicate that inflation is a positive determinant of output growth in the low‐growth regime. Furthermore, output growth significantly boosts inflation during low‐inflation regime. Thus in a situation, when both inflation and output growth are low, moderate inflation is helpful to growth as well as rise in growth feeds back into inflation. On the other hand, during high‐inflation regime, nominal uncertainty significantly reduces inflation, thus providing evidence in support of the price "stabilization" motive of the monetary authority. [ABSTRACT FROM AUTHOR]

This paper studies the impact of output growth on output growth uncertainty by considering two important issues hitherto not properly and adequately addressed to in the existing empirical studies specifying this relationship. These are: (i) the possible existence of a threshold level of output growth, and the consequent identification of two regimes characterized by high and low output growth, and (ii) whether or not the coefficient capturing the causal link is different in these two output growth states. This paper proposes a regime switching model to study this asymmetric effect for 16 OECD countries. Based on monthly time‐series observations, our results strongly support that the impact varies significantly between the two output growth regimes with the coefficient in the high growth regime being negative for majority of the countries. [ABSTRACT FROM AUTHOR]