| Summary: | The issue relating to inflation has generated an enormous volume of literatures and heated debates in recent years. Different research and views carry different evidence on the nature and causes of inflation. It is essential to study inflation not only in Malaysia, but also each country because inflation is devastating. Inflation creates problems and introduces noises in the functioning of the economy that is likely to affect economic growth. However, it is not an easy task to tackle the inflation problem effectively. In order to hand the inflation problem successfully, accurate assessment of the causes of the problem is critical as wrong diagnosis of the nature of the problem will lead to the application of inappropriate cures that might produce unintended adverse effects on the economy.
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