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New Approach to Inflation Phenomena to Ensure Sustainable Economic Growth

Author

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  • Stasys Girdzijauskas

    (Institute of Social Sciences and Applied Informatics, Kaunas Faculty, Vilnius University, Muitines 8, LT-44280 Kaunas, Lithuania)

  • Dalia Streimikiene

    (Institute of Social Sciences and Applied Informatics, Kaunas Faculty, Vilnius University, Muitines 8, LT-44280 Kaunas, Lithuania)

  • Ingrida Griesiene

    (Institute of Social Sciences and Applied Informatics, Kaunas Faculty, Vilnius University, Muitines 8, LT-44280 Kaunas, Lithuania)

  • Asta Mikalauskiene

    (Institute of Social Sciences and Applied Informatics, Kaunas Faculty, Vilnius University, Muitines 8, LT-44280 Kaunas, Lithuania)

  • Grigorios L. Kyriakopoulos

    (School of Electrical and Computer Engineering, National Technical University of Athens, 15780 Zografou, Greece)

Abstract

The problem of inflation is crucial for ensuring sustainable economic growth of the country. In the broadest sense, the economic dimension of sustainable development represents the general economic health of the country. Such macroeconomic indicators as unemployment and inflation rates are the main economic indicators of sustainable development. This article discusses the historical aspects of inflation development and the attitudes of economists towards it. The article presents a new approach to inflation and analyses the main reasons for its formation by developing a new analytical model of aggregate inflation. Based on new analytical model, the theoretical analysis of the formation of an economic bubble is provided based on saturation phenomena and its micro and macroeconomic implications are discussed. The main input of this paper is the creation of an extended (detailed) inflation model representing the main drivers of inflation and therefore contributes to the concept of controlled economic growth, which is necessary to ensure sustainable economic growth of the country.

Suggested Citation

  • Stasys Girdzijauskas & Dalia Streimikiene & Ingrida Griesiene & Asta Mikalauskiene & Grigorios L. Kyriakopoulos, 2022. "New Approach to Inflation Phenomena to Ensure Sustainable Economic Growth," Sustainability, MDPI, vol. 14(1), pages 1-21, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:1:p:518-:d:717422
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    References listed on IDEAS

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    1. Elena Bobeica & Matteo Ciccarelli & Isabel Vansteenkiste, 2019. "The link between labor cost and price inflation in the euro area," Working Papers Central Bank of Chile 848, Central Bank of Chile.
    2. Garcia, Márcio G.P. & Medeiros, Marcelo C. & Vasconcelos, Gabriel F.R., 2017. "Real-time inflation forecasting with high-dimensional models: The case of Brazil," International Journal of Forecasting, Elsevier, vol. 33(3), pages 679-693.
    3. Ang, Andrew & Bekaert, Geert & Wei, Min, 2007. "Do macro variables, asset markets, or surveys forecast inflation better?," Journal of Monetary Economics, Elsevier, vol. 54(4), pages 1163-1212, May.
    4. Marek Jarociński & Michele Lenza, 2018. "An Inflation‐Predicting Measure of the Output Gap in the Euro Area," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 50(6), pages 1189-1224, September.
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    2. Hongni Zhang & Xiangyi Xu, 2023. "Innovative Technology Method Based on Evolutionary Game Model of Enterprise Sustainable Development and CNN–GRU," Sustainability, MDPI, vol. 15(5), pages 1-17, February.
    3. Maryna Brychko & Yuriy Bilan & Serhiy Lyeonov & Dalia Streimikiene, 2023. "Do changes in the business environment and sustainable development really matter for enhancing enterprise development?," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(2), pages 587-599, April.
    4. Hui Li & Xue Huang & Qing Xu & Shuntao Wang & Wanqi Guo & Yan Liu & Yilin Huang & Junzhi Wang, 2023. "A New Approach to Evaluate the Sustainability of Ecological and Economic Systems in Megacity Clusters: A Case Study of the Guangdong–Hong Kong–Macau Bay Area," Sustainability, MDPI, vol. 15(7), pages 1-25, March.

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