Abstract

This study investigates inflation's influence on sustainability by taking regional integration and globalization index as moderating variables. The inflation rate is an important indicator to measure economic performance and evaluate any country's sustainability goals. Globalization and regional integration are important due to connectedness among regions and countries. This study analyzed data collected from 64 Belt and Road Initiatives (BRI) countries from 2005 to 2020 using the two-step system Generalized Method of Moments method and the robustness tests for the validation. The results suggested that the inflation rate negatively impacts sustainability. BRI countries need to control the inflation rate to attain sustainability goals. However, the robust impact of the globalization index on the relationship between the inflation rate and sustainability is positive and the moderating impact of regional integration is also significantly positive on the connection between the inflation rate and sustainability. The globalization index and regional integration index have a positive impact because the global world is connected, and every country designs economic policies based on global data that is available to them. Countries are investing to enhance local manufacturing and production capacities and economic teams make decisions accordingly. Inflation rates can be managed, and sustainability can be attained by taking benefit from the concepts of globalization index and sustainability. Due to these phenomena, countries import cheap raw materials, clean and renewable technologies, and cheap goods and services from other countries to manage the supply-demand and control the inflation rate, ultimately resulting in sustainability.

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