Economics, Econometrics and Finance
6 years ago

Optimal inflation rate in Swaziland boosts economic growth and minimizes losses.

African Journal of Economic and Management Studies
Endogenous monetary approach to optimal inflation–growth nexus in Swaziland
Andrew Phiri

Paper Summary

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The study looked at how inflation affects economic growth in Swaziland from 1975 to 2016. By using a special model, the researchers found that an inflation rate of around 7.64% is best for maximizing economic growth. Above this rate, high inflation can hurt the economy, especially by reducing the positive impact of exports. This is important for Swaziland, as a lot of government money comes from trade with other countries. This study is the first to use this approach in Africa, and it could help other African countries figure out their own optimal inflation rates.