Correlation between high rates of inflation and economic growth?

High inflation = high price for goods

This means that when there is high inflation money won't be able to go as far so there won't be as
much consumption.

High inflation = low rate of economic growth

• High rates of inflation slows economic growth and hyper inflation will almost destroy an
economy but even a moderate rate of deflation is also harmful. Obviously there is non
linear relationship between them and so its not appropriate to use the linear models that
are commonly used in economic so correlation is not quite the right word.

Economics works in integration. No policy can work in isolation but rather it is

how each works on the presence of another. Neither can a sector be ignored
to cater to another sector. It is estimated that systematic implementation of
the monetary policy, immaculate monitoring of debt servicing, steady check
on prices are all an ongoing process. All policies need to be devised and
implemented because it is these concerted efforts that will help to reduce
looming ratios of poverty and unemployment. All said and done, it is the
continuity of major micro and macro economic policies and proper
implementation that is the key.

The most important economic variables are as follows:

1.Gross Domestic Product
2.Agreegate Personal Income
3.Inflation
4.Deflation
5.Supply and demand of Key Inputs (For instance Oil, Gas,Fertilizers etc)
6.Interest rate
7.Agricultural production
8.Industrial production
9.Exploration of Natural Resources
10.Consumption of money
11.Consumption pattern (pattern of use of lusurious and consumer goods)
12.Unemployment rate
13.Direct foreign investment
14.Domestic investment
15.Aggregate savings and savings behaviour
16.Capital Output Ratio
17.Volume of Governmetal Loans
18.Volume of Private Loans
19.Difference between birth rate and rate of economic development
20.Volume of Liquidity or circulated money in an economy.

Dear these are only the names of economic variables. A long debate can be
made on each variable that how it positively or negatively effect economy.

Factors Contributing to Economic Growth

A good way to think of economic growth is the potential for an economy to produce more
goods and services, according to harpercollege.edu. This doesn't necessarily
mean that the economy does produce more of these things, but the increase in
potential shows that the economy is, in fact, growing. There are many factors that
can contribute to this growth, and there are three major factors that have more
impact than others

More Resources
 One of the chief catalysts of a growing economy is an increase in the available
resources. Throughout history, wars were fought over territory, because kingdoms that
had more land could grow more food, which meant that they could support a larger
economy and population. While it isn't as common for war to be declared over
resources, there is still a great deal of competition in order to get them and use them. As
another example is the talk of increasing offshore drilling and of drilling for oil in Alaska
in order to fix the United States' economy-- more resources (oil) would result in better
economic growth.

Superior Resources
 Another factor that can contribute to economic growth is an increase in the quality of
available resources. For instance, jet fuel is a more suitable fuel than coal for powering
vehicles. So if an economy switches from one resource (coal) to another, more efficient
resource (jet fuel), then that economy will see a growth because there is a higher quality
resource that can be used. A simpler example is that good, black, rich soil that produces
higher quality crops is worth more than soil that will produce crops that are edible but not
as fertile.
Technology

 An increase in technology also helps spur economic growth. Oftentimes it's

advanced technology that allows a society to get more or better quality resources.
For instance, without the technological advances of the past few decades we
wouldn't have access to wind energy, tidal energy, solar energy or the variety of
biofuels that we do now. Because of technology that allows us to both capture
more resources and make better use of the resources that we have, there is a
great potential for economic growth.

Sound Economic Policy

 A stable economic environment that fosters growth requires sound government.

Economists since Adam Smith in the 18th century have recognized the need for
government to protect property rights and enforce a system of contracts that
guards against fraudulent transactions in the marketplace. Pfeffenzeller cautions
that government should assume a balanced role in its stewardship of a nation's
economy, noting that excessive regulation and other intrusion poses unnecessary
costs on business, stifling economic activity. Rather, governments should employ
a level of regulation that protects the economy from reckless business activity.

Entrepreneurship

 Writing in the Concise Encyclopedia of Economics, economist Paul Romer points out
that growth occurs when someone takes resources, such as land, labor and
capital, and rearranges them in a way that makes them more valuable. This
observation highlights the importance of entrepreneurship in driving economic
growth. Entrepreneurs often introduce new technologies and other innovations
that displace old ways of doing business. Austrian-born economist Joseph A.
Schumpeter wrote in the early 20th century of the importance of entrepreneurs in
"The Theory of Economic Development."

Price Stability
 A stable price system that holds inflation to a minimum facilitates the kind of decision
making that generates economic growth. Dr. Stephan Pfeffenzeller, a lecturer in
economics at the University of Liverpool, points out that stable prices help guide
production and investment decisions. Maintaining low inflation requires strong monetary
policy that operates independently of political pressure and strives to contain inflationary
pressures, thus fostering stable rates of growth.

International Trade and Investment

 Economic globalization is a modern-day reality, with goods and investment capital
flowing across borders at unprecedented levels. Free trade agreements and entities
such as the North American Free Trade Agreement and the World Trade Organization
have fueled the growth of this global economy. Pfeffenzeller argues that a nation's
openness to international trade and foreign investment promotes growth. Increased
exports contribute to higher productivity, Pfeffenzeller writes, citing post-World War II
Germany as an example.