One of the most significant macroeconomic objective conflicts involves economic growth and inflation. Rapid economic growth yields a shortage of skilled labour, hence leading to wage inflation and increased prices. Moreover, high demand growth rates in a rapidly growing economy can lead to high product prices at the market.

An example

For instance, the Lawson boom of the late 1980s in the UK yielded substantial inflationary pressures, hence precipitating a recession, mainly emanating from high-interest rates induced to curb lending and spending.

Nevertheless, economic growth is not necessarily accompanied by inflation. From 1993-2007, the UK experienced one of the most prolonged periods of economic growth with significantly low inflationary rates in the country's history. The UK government ensured that changes in the economy were aligned with the overarching trend rate of economic growth to avoid a conflict between macroeconomic objectives. In particular, the puzzle was addressed using realistic interest rates to maintain the appropriate balance between supply and demand. Notably, all categories of macroeconomic objectives conflicts involve inflation. Thus, crafting and implementing relevant policies, especially for regulating the balance between aggregate supply and demand, is one of the primary techniques available for addressing all categories of macroeconomic objective conflicts.