The Control of Inflation in Conditions of Rapid Economic Growth

Abstract

In their search for new capital, the developing countries frequently turn to inflationary methods. The temptation to finance development by inflationary means is greatest in developing countries, which strive to achieve forced savings by deficit financing of government budgets and thus to acquire resources needed for investment. The conception that resources for development can be appropriated bygovernments through inflationary savings is frequently promoted by the consideration that if a country refrains from ambitious development ventures it chooses ipso facto stagnation, dependence on foreign assistance for its balance of payments and substandards of living.