Question

Mallick, et al. (2001) find equilibrium relationship between inflation and economic growth in four south asian countries (bangladesh, india, pakistan, and sri lanka).

Answer 1

${\huge {\mathfrak {Answer :-}}}$

➡️ The relationship between inflation and growth remains a controversial one in both theory and empirical findings.1 Originating in the Latin American context in the 1950s, the issue has generated an enduring debate between structuralists and monetarists.

➡️ The structuralists believe that inflation is essential for economic growth, whereas the monetarists see inflation as detrimental to economic progress.

➡️ There are two aspects to this debate: (a) the nature of the relationship if one exists and (b) the direction of causality. Friedman (1973: 41) succinctly summarized the inconclusive nature of the relationship between inflation and economic growth as follows: “historically, all possible combinations have occurred: inflation with and without development, no inflation with and without development”.

That's it..