Stabilization is a vital component of transition. Transition economics is a change from a centrally planned economy to free market. In 21st century, India and China are the world's fastest growing economic countries. This paper compares transition economic relationship in terms of inflation and growth in India and China. Data has drawn from IMF. Macroeconomic parameters clearly confirm that both Chinese and Indian economies are against inflationary capacity constraints. After transition, inflation does affect on growth rates in a long run in both countries since 1979 to 2009. As a result, both countries have growth and inflation rates negative correlation. However, we can also see much higher fiscal deficits are associated with higher inflation its result lower growth.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.