Inflation and Money Growth (Case of Albania and Germany)

Abstract

The main purpose of the study is to explore the correlation between the money supply and inflation rate for Albania case, within period of time from 2010 to 2015. Monthly observations of inflation and money supply are obtained from International Monetary Fund. Empirical findings indicate that the changes in money supply have significant impact on Inflation starting from second month in Albania. The significant impact found in Germany takes place starting from the first month. For Albania case, one of the first reasons is that its economy is moving slowly and the second reason is because of the informality.