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Inflation, Banking, and Economic Growth


The world has seen a dramatic decline in inflation rates in recent decades, but concerns about inflation may still be warranted, especially in some countries. Evidence is mounting that inflation is harmful to economic activity even at fairly modest rates of inflation because of the way it adversely affects the banking sector and investment.

The world has seen a dramatic decline in inflation rates in recent decades, but concerns about inflation may still be warranted, especially in some countries. Evidence is mounting that inflation is harmful to economic activity even at fairly modest rates of inflation because of the way it adversely affects the banking sector and investment.


Suggested citation: Boyd, John H., and Bruce Champ, 2006. "Inflation, Banking, and Economic Growth," Federal Reserve Bank of Cleveland, Economic Commentary, 05.15.2006.

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