The concept of inflation and its essence

Since the economy of our and many other countries has acquired a market nature, the role of money has increased significantly. It became much more dependent on them than before. They are the main element of such a phenomenon as inflation.

This process is characterized by analysts as one of the most painful in the sphere of finance and money circulation. In general, the notion 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 one.

The concept of inflation can be supplemented with the following properties:

• Depreciation of money;
• Imbalance of supply and demand;
• A decrease in the purchasing power of money.

Thus, this economic process includes several basic characteristics. At the same time, they are similar (with slight differences) for both open and hidden inflation. Briefly describe each of these two types.

The concept of open- type inflation implies mainly a price increase (significant or insignificant) for goods and services. A closed type is usually found in a non-market economy.

This term was first used in 1861 by North American economists. In Latin, the word inflatio means something like a "swelling". So during the Civil War, the process of the so-called swelling of commodity-money circulation was characterized.

Thus, the concept and essence of inflation can be considered disclosed, albeit in general terms. It is important, however, in addition to learn about what are the causes of this phenomenon. There are a lot of them, and each time they can be different. In this case, consider the most "influential" and obvious ones. So, this is:

• Budget deficit ;
• Issue of money;
• Excess of money supply over commodity;
• Excessive growth of wages;
• Excessive investment and uncontrolled investments.

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

The concept of inflation, as well as its causes, is far from all that is necessary to know about this economic phenomenon. It is interesting that it can have a very different nature of the "course of the disease." Scientists-economists distinguish several basic types (in addition to open and closed) inflation. It happens:

• Galloping / hyperinflation / creeping;
• Balanced / unbalanced;
• Unexpected / expected;
• Imported;
• Other.

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 by one of the most serious sciences - the economy. Inflation, the concept of which was discussed above, has become one of the most pressing problems to date. For the reason that it can be one of the factors of the onset of the economic crisis, the study of its prerequisites and the search for methods for preventing it are being undertaken by scientists around the world today.