Inflation and growth

Doug Henwood dhenwood at panix.com
Fri Jan 28 07:03:14 PST 2000


Hep Ingham wrote:


>Every morning on NPR Maureen McCallister talks about the impending
>interest rate hike to ward off inflation.
>
>Are there any studies correlating inflation with growth/contraction?
>Are there limits, above which, inflation causes contraction?

I think that even World Bank economists concede that inflation doesn't become a serious problem until it gets over 10%. What they don't say is that an economy experiencing >10% inflation is generally one suffering from serious problems - e.g. political crisis, structural decline, unresolved class conflict - of which the inflation is more a symptom than a cause.

Doug



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