Impact of inflation on economic growth thesis

Industrialization and agriculture are seen as a higher part of development and structural change. Some economic analysts are of the view that industries play a vital role in the economic growth and development of any country.

Impact of inflation on economic growth thesis

The study is geared towards achieving the following objectives; to estimate the impact of Inflation on economic growth, determine the extent of long-run relationship between inflation and economic growth. R-squared showed that The Breusch-Godfrey serial correlation LM P-value implies that there is evidence of auto correlation in the model; while the F-statistics of its The overall result of the study reveals that inflation possessed a positive impact on economic growth through encouraging productivity and output level, and that long-run relationship exists between inflation and economic growth as seen in the Co-integration test.

The Granger Causality Test indicates that there no causal relationship Impact of inflation on economic growth thesis inflation and economic growth.

Impact of inflation on economic growth thesis

Therefore, the study recommends that in order to reduce the instability posed by inflation to the economy the relevant authority should adopt stringent measures to control money supply through the use of effective monetary policy instrument. Economic growth however reflects the increase in the gross domestic product GDP of a country, Inyiama, The objective of every monetary policy and their setters all over the globe is to evolve strategies for stabilizing the price of goods and services.

The reason is to entrench sustainable development and growth which is granularly being eroded by the week purchasing power of the domestic naira. The word inflation rings a bell in the market economics of the world. It is a monster that threatens all economic because of its undesirable effect Imobighe, ; Adenuga, Even though some evidence suggests that moderate inflation helps in economic growth Bawa and Abdullahi; ; Omotosho and Doguwa, ; Amandeep, the problem of inflation surely is not a new phenomenon.

It has been a major problem in the country over the years. Inflation is defined as a generalized increased in the level of price sustained over a long period in an economy Lipsey and Chrystal, According to Umaru and Zubairu, the concept of inflation can be define as persistence rise in the general price level of broad spectrum of goods and services in a country over a long period of time.

Inflation is a household word in many market oriented economics. Although several people, producers, consumer, professionals, non-professional, trade violists, worker and the likes, talk frequently about inflation particularly if the malady has assumed a chronic character yet only selected few knows or even bother to know about the mechanic and consequences of inflation.

Oyakhilomen and Rekwot traced the history of inflation in Nigeria to the s when cheap money policy was adopted by the government to stimulate development after independence. After on appreciable economic performance in the early s, the Nigeria economy witnessed some anxious moment in the late s to mid s.

Severe pressure built up in the economy mainly because of the expansionary fiscal policy of the federal government during these years. This was accompanied by rapid growth in domestic money supply, exacerbated by the monetization of the earning from oil Kumapayi, and high unitary expansion as the high government deficit was financed largely by the central Bank of Nigeria.

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This was exacerbated by the transfer of government sector deposit to the banks and the resultant increase in their free reserves with adverse consequences on the general price level. The inflationary pressure was further aggravated by high demand of imports of both intermediate inputs and consumer goods due to over valuation of the naira which makes imports relatively cheaper than locally manufactured goods.

In this case, the impediments to development may be referred to as cost. Economics theory, however, postulates that for the profit to be maximized, cost should be minimized. One of the main costs is inflation, which has turned into canker worm eating deep into the rations path of economic progress.

However, as fiscal discipline was restored in the second half ofthe pressures on the exchange rate and domestic prices renewed pressures and some uncertainty towards the end of the year as the CBN gradually relaxed its high monetary policy.

Undoubtedly, one of the macroeconomic goods which the government strives to achieve is the maintenance of stable domestic price level.

Essay on Inflation: Types, Causes and Effects

This goal is pursued in order to avoid cost of inflation or deflation and the uncertainty that follows where there is price instability Ibrahim and Agbaje,; Salam, The effect of inflation on economic growth will be examined bearing in mind that country will grow faster in real terms if inflation is reduced to a least minimum.

Perhaps it should be mentioned here that inflation is not in compatible with growth. As it is generally believed that the attainment of every other macroeconomics goals depend on the maintenance of a stable and low inflation environment Ajide and Lawanson, ; Zahra A considerable amount of literature examining the relationship between inflation and economic growth in both developed and developing economics are available.

However, several of those should have shown that inflation can have either positive or negative impact on the performance of the economy. Positively, inflation can lead to a higher sustained growth due to the effect it has on capital allocation.

Also through it negative impact on productivity in an economy, inflation result to adverse effect on the economic growth Sarel While the structuralists argue that inflation is vital for economic growth to prevail, the monetarists posit that inflation is harmful to economic growth Doguwa, To date as opined by Ahmed and Mortazaseveral empirical studies confirmed the existence of either a positive or negative relationship between these two major macroeconomic variables even as Mubarik argue that low and stable inflation promotes economic growth and vice versa.

Omoke tends his support by emphasizing that despite these plethora, of studies in both developing and developed countries, the literature on inflation and economic growth in Nigeria is still very scanty.

Burro and Grilleposit that mainstream economists believe that high rate of inflation are caused by high rate of growth of the money supply. They of the view that changes in inflation are sometimes attributed to fluctuation in real demand for goods and services or in available supplies i.

However, practical experienced of the Federal Reserve in the united states US Have shown that it is may Colander the US money supply growth rate increased faster than price itself.Hiv/Aids and Its Effects on Economic Growth.

HIV/AIDS and Its Effects on Economic Growth Taywanna Drayton ECO Instructor Stephanie Webb August 16, HIV/AIDS and Its Effects on Economic Growth For most developing countries, the main source of progress is through industry and domestic saving.

In order for industry to be . Analysis: The relationship between inflation and economic growth. Definitions and concepts.

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Before we start to our analysis about inflation and economic growth relationships, it needs some descriptions, as to what inflation is and what economic growth, as the starting point.

The research attempts to come up with the model and thus a new concept in the study of economics. Time The research was conducted over a short period of time. Lack of Resources.

The relationship between inflation and economic growth, from diverse direction, it is stayed for long period in debating. But, now a days, most scholars agreed its harmfulness beyond some threshold. The threshold size is different among the developed economies and developing nations. Hiv/Aids and Its Effects on Economic Growth. HIV/AIDS and Its Effects on Economic Growth Taywanna Drayton ECO Instructor Stephanie Webb August 16, HIV/AIDS and Its Effects on Economic Growth For most developing countries, the main source of progress is through industry and domestic saving. In order for industry to be . features of non-linearity in growth-inflation association. For instance, Huybens and Smith (, ) stated that even predictable inflation may harm economic growth by impeding financial sector allocating resources effectively. Other theoretical studies focused on the question of how expected inflation impacts the financial system.

unemployment and economic growth have not been done on the twin effects of inflation and unemployment on economic lausannecongress2018.com economic studies 3/5(2). Impact of Inflation on Economic Growth: Case Study of Nigeria () scope and quality as a thesis for the degree of Master of Science in Economics.

Industrialization on Economic Growth in Nigeria - lausannecongress2018.com

Assoc. Prof. Dr. Sevin Uğural economic growth.

Impact of inflation on economic growth thesis

Inflation at a low level is necessary for economic growth. This paper aims to review the theoretical and empirical studies on the impact of inflation on economic growth.

Research Thesis on Inflation by Shoaib - Free download as Word Doc .doc), PDF File .pdf), Text File .txt) or read online for free. The Impact of Inflation on Business and Trade: a case study of Ghana and Canada The Phillips Curve is thought to be the ³proper´ way of balancing economic growth and inflation. For this reason the 5/5(5). The effect of foreign direct investment on growth in Sub-Saharan Africa Accordingly, this thesis explores the effect of FDI on economic growth in the region, impact of FDI on growth and domestic investment to be obscured in many FDI-growth studies, because FDI seems to have a higher effect on growth in developing countries. effects on economic growth is drawn from two interesting results. Firstly, there is an insignificant negative relationship between inflation targeting and economic growth.

Our critical review shows that there is no consensus on the relationship between. Research Thesis on Inflation by Shoaib - Free download as Word Doc .doc), PDF File .pdf), Text File .txt) or read online for free.

The Impact of Inflation on Business and Trade: a case study of Ghana and Canada The Phillips Curve is thought to be the ³proper´ way of balancing economic growth and inflation. For this reason the 5/5(5).

Impact of Inflation on the Economic Growth of Nigeria - lausannecongress2018.com