INFLATION AND ECONOMIC GROWTH A CRıTıCAL ASSESSMENT OF THE FORCED SAVıNG THESIS

Date

1984

Author

ÖNİŞ, Ziya

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inflation may exert a potentially beneficial influence on ca- pital accumulation via two distinct mechanisms, the forced saving effect and inflation tax effect, respectively. This may cxplain, in part, the persistence of high and volatile rates of inflation in semi- industrialised economies. The links between inflation, income distribution and growth are examined in the context of a simple model which is also employed as a basis for discussing the impact of stabilisation policies. The principal hypothesis is that the type of inflation that will maximise forced savings is likely to lead to a significant decline in the productivity of investment. The case for the deliberate promotion of inflation is, tlıerefore, found to be unconvincing, with a corresponding need to shift attentions to more direct methods of augmenting domestic savings.

URI

https://hdl.handle.net/11511/110915

Collections

Department of Economics, Article