Advances in Economics, Management and Political Sciences
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Proceedings of the 2nd International Conference on Business and Policy Studies
Series Vol. 11 , 13 September 2023
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The Concept of Threshold Inflation and How Threshold Inflation Relates to Economic Growth
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Abstract
The relationship between inflation rate and economic growth has resulted in their correlation becoming a subject in an extensive body of empirical and theoretical studies. Many studies have focused on how inflation relates to positive or negative growth. A gap exists in the threshold value beyond which this correlation works. The study fills this gap by using the threshold model to understand a threshold value beyond which inflation negatively impacts economic growth. The research examines the positive and negative associations between inflation and economic growth, the significant threshold value of the inflation rate beyond which it adversely affects growth, and the variation of threshold value and impact across different countries and economies in different developmental stages. The method involves analyzing secondary sources to establish a theoretical framework on the negative relationship between inflation and economic growth and an empirical framework on the relationship between high and low inflation rates on economic growth and threshold values and their impact on economic growth. The method also involves examining practical examples as a strategy to show that there is a variation in inflation threshold value. The concept of threshold inflation shows that there is a value beyond which an economy of a certain country, irrespective of developmental stage, negatively affects economic growth.
Keywords
inflation, threshold value, inflation threshold, economic growth, threshold model
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 2nd International Conference on Business and Policy Studies
- ISBN (Print)
- 978-1-915371-49-2
- ISBN (Online)
- 978-1-915371-50-8
- Published Date
- 13 September 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/11/20230517
- Copyright
- 13 September 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited