Inflation and Development: Central Bank Stabilization Policies Revisited

Anis Chowdhury () and Jomo Kwame Sundaram ()
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Anis Chowdhury: University of Western Sydney
Jomo Kwame Sundaram: Khazanah Research Institute

Development, 2023, vol. 66, issue 1, 3-14

Abstract: Abstract Against the backdrop of an inflationary surge due to war, sanctions and pandemic disruptions, the article argues against dogmatic responses to inflation. Using extant theoretical and empirical literature as well as time-series data, it examines the scope for ‘moderate inflation rates’, above what is currently targeted. Specifically, it seeks to ascertain the potential developmental gains from moderate inflation (say, 10–15%), the risk of inflation accelerating to harm growth, and the implications of central bank independence during the recent inflation episode and for supporting sustainable development.

Keywords: Inflation targeting; Growth; Monetary policy; Central bank independence; Sustainable development (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 O23 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1057/s41301-023-00359-2

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