Abstract

This paper examines the impact of inflation on economic growth of countries, taking India and Australia as examples. It is argued that inflation can have both positive and negative impacts on economic growth. Generally, low inflation is beneficial to economic growth. However, inflation can be a sign of economic growth, as it is with India and Australia. Both countries have had periods of high inflation and economic growth. The paper also looks at the differing approaches to inflation management of the two countries and the effects of this on economic growth. The research suggests that, in general, inflation has a negative effect on economic growth, particularly in developing countries, who are more vulnerable to the effects of inflation.

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