Threshold Effects In The Relationship Between Inflation And Economic Growth In Kenya: 1970-2014

ABSTRACT It is widely agreed among economists, policy makers and central bankers that all macroeconomic policies seek to attain high levels of economic growth coupled with very low rates of inflation. High inflation rates have resulted to a number of adverse effects on the economic growth of many countries over time. But how low should the inflation rate be so as not to affect economic growth negatively? Economic policymakers in Kenya have been working towards the attainment of a 5 percent rate of inflation as the most ideal rate for economic policy purposes. Is this rate of inflation the mos…