An Empirical Study on the Effect of Gross Domestic Product on Inflation: Evidence Indian Data

JK Raju, Manjunath BR, Rehaman

Abstract

The study focuses on the effect of Gross Domestic Product and inflation. It is been believed that increase or decrease in inflation rate will develop an economy of the country. The data has been used for the period of 1992 to 2017. This empirical analysis used Unit root test, Co-integration test, Granger causality test and Vector correction model. There is long-run positive and negative significance between economic growth and inflation. The increase of GDP will help to increase in growth of economy and Inflation will react to an economy.