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May/June 1996, 
Vol. 78, No. 3
Posted 1996-05-01

Inflation and Growth

by Robert J. Barro

The academic literature contains a lot of theoretical work on the costs of inflation. This analysis provides a presumption that inflation is a bad idea, but the case is not decisive without supporting empirical findings. Although some empirical results suggest that inflation is harmful, the evidence is not overwhelming. It is therefore important to carry out additional empirical research on the relation between inflation and economic performance. This article explores this relation in a large sample of countries over the past 30 years.