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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
JANURAY 2011
VOL 2, NO 9
William et al, (2001) investigated that poor are more than rich who like to discuss the inflation
as a major issue at national level. It was also found that change in the share of poor in national
income, percentage turn down in poverty, and percentage change in the real minimum wage
are negatively associated with inflation.
2. Methodology
2.1 Inflation
The overall general upward price movement of goods and services in an economy, usually as
measured by the Consumer Price Index and the Producer Price Index 1 .
2.2 Corruption
Giving or obtaining advantage through means which are illegitimate, immoral, and/or
inconsistent with one's duty or the rights of others. Corruption often results from patronage 1 .
In previous studies Miguel et al, (2000) investigated that too much variance in the inflation
causes more corruption in equilibrium. Martin (2002) argued that corruption reduces when
economic conditions change from poor to rich but the period of the high inflation tends to
increase corruption.
3. Hypothesis
Ho: There exist correlation between inflation and corruption.
H1: There does not exist correlation between inflation and corruption.
4. Data collection
The data has been collected from the Transparency International web sites regarding
corruption in Pakistan and India (FY1999-2009). The data related to inflation has been
collected from the Asian Development bank, Federal Bureau of Statistics and the web page 2 .
Years
Inflation in
Pakistan
Inflation in
India
Corruption in India
Corruption in
Pakistan
1999 3.58 0.00 2.9 2.2
2000 4.41 3.23 2.8 2.2
2001 3.54 5.21 2.7 2.3
2002 3.5 3.96 2.7 2.6
2003 3.1 2.86 2.8 2.5
2004 4.6 4.63 2.8 2.1
2005 9.3 5.31 2.9 2.1
1 (http://www.investorwords.com & http://www.businessdictionary.com).
2 (http://www.tradingeconimics.com).
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