Why does there have to be inflation
Inflation - auxmoney financial lexicon
Politically inflation is wanted
The state definitely wants inflation - as long as it doesn't get too high. What doesn't look clever at first glance makes perfect sense on closer inspection. Some states want to use it to reduce national debts, the real value of which falls when the money supply increases - the absolute debt value is not affected by inflation, regardless of whether the money supply in circulation is significantly larger (or smaller). With more money in circulation, the debt is correspondingly easier to pay because a currency unit has less purchasing power. As a result, creditors have to accept monetary devaluations, so that this thinking is regarded as an emergency measure if the debt burden of a state threatens to crush its budget; this happened, for example, in Italy in the second half of the 20th century. In Germany there is currently an inflation rate of 1.5 percent (as of 07/17), which is significantly less than ideal.
The reason for this is the fear of deflation. The opposite of inflation, deflation, means a tightening of the money supply. This results in a very negative development of the economy: in the expectation that prices will fall, people would spend as little money as possible. Companies would make much less turnover, which would shrink the economy by many percent accordingly. Combined with the shrinking economic growth, the general standard of living would also fall. This is politically undesirable, so inflation is accepted as the lesser of two evils. For example, there were serious problems with deflation in Japan in the 1990s.
- Straight guys play BL video games
- What are high performance fiber optics
- What do you think of the Turks
- Government officials have to pay taxes
- Need wisdom to copy
- What should I know when visiting Beijing
- Inflation discourages saving
- What should I never do in Monaco?
- What is axillary love
- Why are you going to hate a person
- What should everyone know about Mauritius
- Uses Google keyword tags
- Today's youth is disciplined
- What is the brutal truth about engineers
- What is Gender Discrimination in India
- How do I find offshore development services
- Why do Democrats hate the US
- India How many foreigners live in India?
- Is it a bad job to be a teacher?
- How much do beauticians earn
- What do you think is making you boring
- Can a married Indian marry a Filipino?
- What is urinary incontinence
- What is the significance of social rules
- How do real estate developers raise capital
- What does Chutiye
- Why do bullies give wedgies
- Contains CTC PF
- Do mantras gems and rudraksha work
- How can I avoid my past?
- Where should a tourist stay in Seoul
- Why does Hillary Clinton use crutches
- PlanetSide 2 was a commercial success
- What is OTA