2008Journal of Economic Policy ReformRequires access

Inflation and growth dynamics: the Indian experience

Hrushikesh Mallick

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Abstract

This study investigates the impact of inflation on economic growth in India during the period 1960 to 2005. Applying cointegration procedures, I find that inflation rates have a significant adverse impact on economic growth while investment has a favorable impact. This suggests a policy of targeting price stability is desirable to achieve a higher rate of economic growth in emerging markets.

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This study investigates the impact of inflation on economic growth in India during the period 1960 to 2005. Applying cointegration procedures, I find that inflation rates have a significant adverse impact on economic growth while investment has a favorable impact. This suggests a policy of targeting price stability is desirable to achieve a higher rate of economic growth in emerging markets.

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Available abstract

This study investigates the impact of inflation on economic growth in India during the period 1960 to 2005. Applying cointegration procedures, I find that inflation rates have a significant adverse impact on economic growth while investment has a favorable impact. This suggests a policy of targeting price stability is desirable to achieve a higher rate of economic growth in emerging markets.

Key concepts: Economics, Cointegration, Inflation (cosmology), Monetary economics, Emerging markets, Economic stability, Macroeconomics, Investment (military)

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