Inflation and Economic Growth Relationship
Chapter from the book: Uçar, M. (ed.) 2026. Growth in the Global Economy: A Macroeconomic Framework.

Lokman Salih Erdem
Kırşehir Ahi Evran University

Synopsis

The sustainability of economic growth remains a central subject of debate, particularly between endogenous Dynamics which are based on human capital and knowledge and exogenous dynamics, where physical capital is at the core. Extensive literature exists demonstrating a negative relationship between inflation and economic growth. In this context, while inflation may positively influence growth up to a certain level, exceeding the threshold value tends to erode knowledge and human capital, thereby causing endogenous dynamics to become ineffective over time. Consequently, rendering growth sustainable depends not only on internal and external dynamics but also on macroeconomic stability. In conclusion, it is emphasized that a sustainable growth target can only be achieved by integrating macroeconomic policies determined according to appropriate inflation thresholds harmoniously with these economic theories.

How to cite this book

Erdem, L. S. (2026). Inflation and Economic Growth Relationship. In: Uçar, M. (ed.), Growth in the Global Economy: A Macroeconomic Framework. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub1311.c5289

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Published

June 11, 2026

DOI