Browsing by Author "Sathsarani, S"

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    Driving the pulse of the economy or the dilution effect: Inflation impacting economic growth
    (PLOS ONE, 2022-08-19) Atigala, P; Maduwanthi1, T; Gunathilake, v; Sathsarani, S; Jayathilaka, R
    Economic growth becomes a critical component in the development of every country since it enhances living standards and other related concerns while eliminating poverty. As a developing country, Sri Lanka must place more emphasis to achieve sustainable economic growth. In addition, various factors have positive and negative impacts on economy’s growth. As such, the specific goals of any economy are to sustain long-term economic growth and low inflation. As a result, generally, high inflation is destructive for an economy and low inflation is beneficial. Therefore, it is worth investigating the impact of inflation on economic growth concerning a stable inflation level. This study examines the impact of inflation on economic growth in Sri Lanka by employing the Auto Regressive Distributed Lag model as the estimation technique. Furthermore, the findings illustrate a negative relationship between inflation and economic growth in the short run; when inflation increases by 1%, economic growth decreases by United States Dollar (USD) 3,427.94 million and long run economic growth declines by 107,263.8 million USD. Subsequently, with the current economic reality of Sri Lanka, the macroeconomic policies should be adaptable to maintain the stability of the inflation rate for a sustainable economy.
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    PublicationOpen Access
    A FLOURISHING OR FALTERING ECONOMY: UNEMPLOYMENT IMPACTING SRI LANKAN ECONOMIC GROWTH
    (Sri Lanka Journal of Economic Research, 2023-02-03) Atigala, P; Maduwanthi, T; Gunathilake, V; Sathsarani, S; Jayathilaka, R
    The primary goal of any economy is to achieve long-term economic growth while maintaining a stable rate of unemployment, which is a macroeconomic factor. Moreover, when unemployment rises, real Gross Domestic Product (GDP) falls short of potential GDP. Accordingly, the purpose of this study is to examine the impact of unemployment on the economic growth of Sri Lanka. By using data from the first quarter (Q1) of 2000 to the fourth quarter (Q4) of 2021 and Vector Error Correction Model (VECM) and Granger Causality are applied to analyse the impact of unemployment on economic growth. The findings indicates that there is a unidirectional causality between unemployment and economic growth, and that there is a long run relationship between these two variables, with both long-term and short-term negative impacts on economic growth in Sri Lanka. Macroeconomic policies need to be formulated to sustain the unemployment rate in line with the current economic realities of Sri Lanka for sustainable economic growth and significant contribution to the creation of new jobs and the expansion of existing employment in Sri Lanka.