An Econometric Analysis of Inflation and Economic Growth: A Case Study of Canada and UK

Authors

  • Sajeev U

Abstract

This paper is an econometric analysis of the relationship between inflation and economic growth. The inflation affects economic growth negatively, i.e., it reduces economic growth. But there is a question whether inflation is always harmful to economic growth for an economy or not? For analysing the relationship between inflation and economic growth, i have been taken Canada and UK from the G7 countries. The study support the theory developed by Tobin in 1972 that, inflation can lead to a higher growth rate through the difference between nominal and real variables. According to that, higher inflation can allow firms to make adjustments on real wages, that can’t do for nominal wages.

Metrics

Metrics Loading ...

Published

2018-03-10

How to Cite

Sajeev U. (2018). An Econometric Analysis of Inflation and Economic Growth: A Case Study of Canada and UK. Eduzone: International Peer Reviewed/Refereed Multidisciplinary Journal, 7(1), 1–16. Retrieved from https://eduzonejournal.com/index.php/eiprmj/article/view/73