Introduction:
Most economists have been concerned about the relationship between inflation and the economic growth, for a very long period of time. The combination of the two, that is inflation and economic growth, they distinguish the variables of macro-economic. Inflation has a negative impact on the growth of the country; the South African statistics has proven that. I will be discussing that in details. Firstly, Inflation is simply defined as a situation where prices are perpetually and remarkably increasing in general. My definition of inflation is the situation whereby the economy reaches a contraction phase according to a business cycle. When an economy is in a contraction phase, prices start to emerge and the households, consumers they …show more content…
The figures of population growth shall be expressed on a per capita basis. Consistently economic growth is simply measured in terms of real GDP. The effect of inflation in the economic growth in South Africa is a serious issue. Inflation in South Africa makes the growth of the a country to rise slowly, when the growth of a country rise slowly that surely makes the country to be considered as poor or under-developed country, compared to those developed countries that their economic growth are on a quick …show more content…
The experience of the 1950s and 1960s had led economists to explain substantial inflation as a symptom of too high a level of total demand for output.
The relationship between Economic growth and Inflation:
Quarterly Economic growth rate
% Inflation rate
%
2011 December 4.2 7.1
2011 September 2.4 6.7
2011 June 2.3 6
2011 March 5.6 5.1 2010 December 5.5 4.5
2010 September 4.1 4.2
2010 June 3.8 4.5
2010 March 5 6.1 2009 December 4.5 7.4
2009 September 2.8 7.2
2009 June -3.8 7.5
2009 March 5 6.1 2008 December -2.7 9.8
2008 September 2.8 14.1
2008 June 5.5 13.2
2008 March 3.9
Most economists have been concerned about the relationship between inflation and the economic growth, for a very long period of time. The combination of the two, that is inflation and economic growth, they distinguish the variables of macro-economic. Inflation has a negative impact on the growth of the country; the South African statistics has proven that. I will be discussing that in details. Firstly, Inflation is simply defined as a situation where prices are perpetually and remarkably increasing in general. My definition of inflation is the situation whereby the economy reaches a contraction phase according to a business cycle. When an economy is in a contraction phase, prices start to emerge and the households, consumers they …show more content…
The figures of population growth shall be expressed on a per capita basis. Consistently economic growth is simply measured in terms of real GDP. The effect of inflation in the economic growth in South Africa is a serious issue. Inflation in South Africa makes the growth of the a country to rise slowly, when the growth of a country rise slowly that surely makes the country to be considered as poor or under-developed country, compared to those developed countries that their economic growth are on a quick …show more content…
The experience of the 1950s and 1960s had led economists to explain substantial inflation as a symptom of too high a level of total demand for output.
The relationship between Economic growth and Inflation:
Quarterly Economic growth rate
% Inflation rate
%
2011 December 4.2 7.1
2011 September 2.4 6.7
2011 June 2.3 6
2011 March 5.6 5.1 2010 December 5.5 4.5
2010 September 4.1 4.2
2010 June 3.8 4.5
2010 March 5 6.1 2009 December 4.5 7.4
2009 September 2.8 7.2
2009 June -3.8 7.5
2009 March 5 6.1 2008 December -2.7 9.8
2008 September 2.8 14.1
2008 June 5.5 13.2
2008 March 3.9