Inflation is a very burning issue of every economy and also the most widely observed and addressed economic variable and its overall costs to the economy are well known. Economists developed consensus that uncertainty of inflation rather inflation itself, distorts price mechanism, trespass purchasing power, hinders investment decisions and makes welfare losses on an economy. This notion was informally addressed by Milton Friedman (1977) and then formally by Lawrence Ball (1992) arguing the positive relationship between inflation and inflation uncertainty whereas the inflation causes inflation uncertainty, the proposition opposite to Cukierman-Meltzer hypothesis. However this study analyses the relationship between inflation and inflation uncertainty using monthly data set of Pakistan and neighboring economies as China, Russia, Iran and India for the period of 2000:M1- 20015:M6.GARCH-type Models are used to generate the measure of inflation uncertainty. We used GARCH-L(1) and GARCH-M, GARCH-M(1) models to describe the relation between inflation and inflation uncertainty. The model GARCH-L(1) has lag of inflation in the conditional variance equation and in all economies of under study inflation significantly raises inflation uncertainty as predicted by Milton Friedman. The model GARCH in Mean has the conditional variance in the mean equation and only in case of Pakistan, India, China and Russia inflation uncertainty causes inflation as predicted by Cukierman-Meltzer and no evidence is found about direction from inflation uncertainty to inflation in case of Iran. However, the model GARCH-M(1) has lag of the inflation uncertainty in conditional mean equation. The results suggest that in case of Pakistan and China inflation uncertainty cause inflation and are in line with Cukierman-Meltzer Hypothesis but we have found no evidence in case of India, Russia and Iran. However, the global financial crises 2005 is found to be empirically insignificant in case of all the economies whereas global financial crises 2008 found be empirically significant in case of Pakistan, India and China but found empirically insignificant in case of Russia and Iran. The results of our study justify that monetary authority need to maintain inflation at lower rates. Supervisor:- Dr. Saud Ahmed Khan