What Is The Inflation
One of the common economic and, most important, most prominent in the last decade is the phenomenon of inflation. Inflation means the ongoing process of general price level increase. Inflation causes several problems:
1) an inflationary process is expressed wear purchasing power of money and creates uncertainty for the future, non-financial assets that are linked to wear down, for example salaries, rent, etc., it makes our being unable to buy as in the past that price increases in the value of money down. In fact, the investors will be busy to spend their time and protect against inflation and as a result there is a violation efficiency and productivity. Uncertainty about the future could hurt investments twice since and will consider whether to take out loans (loans not linked to costs as well as interest rates) which could lead to damage growth.
2) Disrupts the inflationary process information on the relative prices of different products, because pick up the various products are the same rates as a result of consumer decisions that go wrong. The manufacturer created problems that may affect the efficient allocation in information sources and it may hurt growth.
3) Inflation increases economic inequality, for example because of the tax burden of discrimination inflationary profits.
4) Inflation causes the erosion of public money and therefore has a minimum of cash in current accounts, for ongoing operations and other activities need their accounts are actually wasting resources on productive activity. Inflation or inflation expectations also has implications for other Macro-economic factors such as the Euro When prices are rising interest rates (inflation and inflation expectations rising, or rising), increasing the interest rates to get people to take fewer loans and save more and buy less (people prefer to hold less money liquid so they will defend himself before the effect of inflation) and if prices go down as buyers. When interest rates costs, so firms loans from the banks of the price increase growing financing expenses negatively influence the bottom line - a small net profit. This causes the relatively poor performance of firms, expectations of the stock go down, as we know investors act according to their expectations and sell the shares because expenses funding which could grow eventually damage economic growth in GNP.
1) an inflationary process is expressed wear purchasing power of money and creates uncertainty for the future, non-financial assets that are linked to wear down, for example salaries, rent, etc., it makes our being unable to buy as in the past that price increases in the value of money down. In fact, the investors will be busy to spend their time and protect against inflation and as a result there is a violation efficiency and productivity. Uncertainty about the future could hurt investments twice since and will consider whether to take out loans (loans not linked to costs as well as interest rates) which could lead to damage growth.
2) Disrupts the inflationary process information on the relative prices of different products, because pick up the various products are the same rates as a result of consumer decisions that go wrong. The manufacturer created problems that may affect the efficient allocation in information sources and it may hurt growth.
3) Inflation increases economic inequality, for example because of the tax burden of discrimination inflationary profits.
4) Inflation causes the erosion of public money and therefore has a minimum of cash in current accounts, for ongoing operations and other activities need their accounts are actually wasting resources on productive activity. Inflation or inflation expectations also has implications for other Macro-economic factors such as the Euro When prices are rising interest rates (inflation and inflation expectations rising, or rising), increasing the interest rates to get people to take fewer loans and save more and buy less (people prefer to hold less money liquid so they will defend himself before the effect of inflation) and if prices go down as buyers. When interest rates costs, so firms loans from the banks of the price increase growing financing expenses negatively influence the bottom line - a small net profit. This causes the relatively poor performance of firms, expectations of the stock go down, as we know investors act according to their expectations and sell the shares because expenses funding which could grow eventually damage economic growth in GNP.