Monetary Policy, Inflation and the Causal Relation between the Inflation Rate and Some of the Macroeconomic Variables

Both monetary policy and inflation are issues of great interest and importance, thus studying them and their impact on the evolution of the macroeconomic variables is a constant concern for our society. The purpose of this article is focused on identifying the existing connections between the inflation rate and some important macroeconomic indicators and also on the dynamics of inflation at a national and European level. The main objective of this study is to reveal the causal relation between the inflation rate and the interest rate of the monetary policy and also between the inflation rate and the unemployment rate, using regression methods.