The concept of inflation and its essence

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Ever since our economy and many other countries has gained market character, the role of money greatly increased.From them began to depend more than ever before.They are the main element of the phenomenon of inflation.

This process is characterized by analysts as one of the most painful in the financial and monetary circulation.Generally speaking, the concept of inflation implies a rise in the general price level in the country.This is not the only criterion that characterizes this phenomenon, but it is - the main.

concept of inflation can be supplemented with the following properties:

  • depreciation of money;
  • imbalance of supply and demand;
  • decline in the purchasing power of money.

Thus, the economic process includes several basic characteristics.In this they are similar (with minor variations) for both open and hidden inflation.Briefly describe each of these two types.

concept of an open type of inflation implies a mainly price increases (major and minor) for goods and services.Private same type, there is usually at a non-market economy.

the first time this term was used back in 1861 by North American scientists and economists.Translated from the Latin word inflatio means something like "swelling."In the period of the Civil War was characterized by a process of so-called swelling commodity-money circulation.

Thus, the concept and nature of inflation can be considered disclosed, albeit in general terms.It is important, however, in addition to know what are the causes of this phenomenon.There are many, and each time they may be different.In this case we consider the most "influential" and obvious ones.So this:

  • budget deficit;
  • currency issue;
  • excess money supply of the commodity;
  • excessive growth of wages;
  • excessive investment and uncontrolled investments.

is important, among other things, said that the causes of inflation can be both internal and external.The latter include, for example, too much government debt to other countries.

concept of inflation and its causes - not all you need to know about this economic phenomenon.Interestingly, it can be very different in nature "of the disease."Economists distinguish several basic types (in addition to indoor and outdoor) inflation.It happens:

  • galloping / hyperinflation / creeping;
  • balanced / unbalanced;
  • unexpected / expected;
  • imported;
  • more.

We also note that inflation is not a purely monetary phenomenon.It also affects the social sphere of society.

All these and other important issues are dealt with one of the greatest science - economics.Inflation, the concept of which was discussed above, has become today one of the most pressing problems.For the reason that it can be a factor in the onset of the economic crisis, the study of its premises and search for methods of preventing it doing today, scientists around the world.