The Impact of Inflation on Economic Growth

Inflation, as one of the most important economic indicators, plays a decisive role in the stability or instability of a country’s economic system. On the other hand, economic growth reflects an increase in productive capacity and societal welfare. This article examines the relationship between inflation and economic growth, with a particular focus on the role of monetary and fiscal policies, price fluctuations, and inflation expectations. The findings of both theoretical and empirical studies indicate that the relationship between these two variables depends on the level and persistence of inflation, as well as the economic structure of countries. Specifically, at low and controlled levels, inflation may be somewhat compatible with production and investment incentives. However, high and persistent inflation leads to slower economic growth through various channels, including reduced purchasing power, increased uncertainty, inefficient resource allocation, and weakened investment. Furthermore, inconsistent and unreliable macroeconomic policies can intensify inflation expectations and amplify negative effects even at lower inflation rates.

کلیدواژه ها:

Inflation ، Economic Growth ، Monetary Policy ، Economic Stability ، Investment