From: DANIEL.DAVIES at flemings.com Date: Fri, 28 Jan 2000 12:29:35 +0000
>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?
This would be the Philips Curve, and its countless derivatives. Check out Brad's website is probably the best thing -- this one should do it;
http://econ161.berkeley.edu/multimedia/USPCurve.html
(ooh dig the funky animated gif philips curve action)
> Are there limits, above which, inflation causes contraction?
That would be what sir would call "hyperinflation". ie when you're in Weimar Germany, or 80s Brazil, and prices are rising so damn fast that keeping up with what anything costs takes up most of your time. No set level for "too high", but the IMF reckons that double digits per month is pretty bad. There is an accounting standard for UK firms with subsidiaries in hyperinflationary economies that is a real laff riot if you like that sort of thing.
cheers
dd