This study intends to explore the causal relationship between inflation and economic growth in Malaysia over the period of 1961-2019. Inflation is crucial for economic growth of a country. The authors try to identify the short-run and long-run relationship between inflation and economic growth through Vector Error Correction Model and Vector Auto-regression Model, respectively. The results are like the previous studies. There exists negative association between the GDP growth and inflation in the short run but positive correlation in the long run. The Granger Causality test revealed there also exists bidirectional relationship between these two variables. The results conclude that inflation does not granger cause GDP growth. However, it also reveals that GDP growth does not cause granger to cause inflation as well. The results can be helpful for the policy makers and researchers for future study.

Keywords : Inflation, Economic Growth, Malaysia.