Inflation Uncertainty and Output Growth in Transition Economies: Evidence from Selected Countries

This study examines the relationship between inflation uncertainty and output growth in two major transition economies, Russia and Kazakhstan, with particular emphasis on the dynamic effects of macroeconomic volatility. Using monthly data from the International Monetary Fund’s International Financial Statistics (IMF IFS) database, inflation is proxied by the Consumer Price Index (CPI), while output growth is represented by the Industrial Production Index (IPI). The study applies the VAR–MGARCH-M–BEKK econometric framework to estimate inflation uncertainty and assess its impact on economic growth through dynamic mean and volatility interactions. The empirical findings reveal that inflation uncertainty does not exert a statistically significant direct short-run effect on output growth in either Russia or Kazakhstan. However, the results indicate substantial volatility persistence, asymmetric shock transmission, and dynamic macroeconomic interdependence between inflation and real economic activity. The study concludes that the impact of inflation uncertainty on economic growth is highly country-specific and dependent on structural characteristics, policy credibility, and external economic exposure.