Influence of inflation on long-term economic growth in the context of the raw material orientation of the national economy

Abstract

In modern conditions for Kazakhstan, it becomes important to choose a development model that would be the most optimal and effective. When developing a model of economic policy, special attention should be paid to the choice of a system of indicators that could adequately describe macroeconomic processes as a whole and their interconnections. At the same time, economists argue that the implementation of the model approach can become the basis for strategic decisions only in a stable economic situation and when in the period under review the change in the cost structure of GDP is not distorted by high inflation. Therefore, in modern conditions of economic development, in our opinion, it is of interest to study the relationship between economic growth and the level of current and threshold inflation. This study substantiates the role of the threshold inflation level and proposes an equation of the functional dependence of this indicator on the main economic indicators. The necessary conditions for the implementation of the inflation targeting regime are disclosed. It is concluded that in conditions of commodity dependence, new effective monetary policy instruments are required.

A review on impact of inflation on economic growth in Nepal

“…In present context, an economy that achieves no or inadequate growth is always associated with important problems such as poverty, unemployment and low welfare (Ayd et al, 2016). It is necessary to determine inflation thresholds for each country in order to achieve sustainable economic growth (Omarova et al, 2020). The generally accepted view is that inflation has a negative impact on growth in the medium and long term.…”