The Effect of Inflation on Economic Growth in Tanzania
Joseph L. Shitundu, Eliab G. Luvanda
Download Article | Published On 01/07/2000

Abstract

The question of the effect of inflation on economic growth is one of the issues that have been hotly debated in macroeconomics. While some scholars, particularly those leaning towards the Keynes1an and Structural perspectives rend to believe that inflation is not harmful to economic growth, other scholar , particularly those in the monetarist tradition, argue that inflation is harmful to economic growth. In this study, use is made of the Least Trimmed Squares (LTS) method, as introduced by Rousseeuw and Leroy (1987), which detects regression outliers and produces robust regression, to examine the impact of inflation on economic growth in Tanzania. The empirical results obtained suggest that inflation has been harmful to economic growth in Tanzania.

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