The Influence of Inflation on the Real Economy

DOI

10.2991/aebmr.k.220603.134How to use a DOI?

Keywords

Inflation; Economic Development; Monetary policy

Abstract

Various studies on inflation’s relationship with the real economy show that inflation harms economic development. Also, various economic theories confirm that inflation affects a country’s economic performance even though monetary policies had difficulties expressing this. This study shows that inflation may be linked to the overall elasticity of factor substitution and that this is a solution to the problem at hand. Inflation may have a detrimental impact on factor substitution in various microeconomic ways. When applied to a fundamental neoclassical monetary growth model, this impact is frequently substantial enough to challenge the benchmark finding in the steady-state and to outweigh any potential positive effects of inflation on the convergence path. There are several ways this study adds to the improvement of aggregate models for economic growth.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Shen Xie
PY  - 2022
DA  - 2022/07/01
TI  - The Influence of Inflation on the Real Economy
BT  - Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022)
PB  - Atlantis Press
SP  - 821
EP  - 825
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220603.134
DO  - 10.2991/aebmr.k.220603.134
ID  - Xie2022
ER  -