Effects Of Inflation On The United Arab Emirates

Inflation is one of the most talked about words in society that causes a big problem in economics today. Inflation is an increase in the overall prices of goods and services and a decline in the purchasing value of money. This exists when the money supply surpasses the goods and services that are available. For this commentary, I chose to pick the article In a Venezuela Ravaged by Inflation, ‘a Race for Survival’ that deals with the topic inflation.

The United States inflation rates are a problem, if the government were to control them then the United States would flourish from a “B+” economy to a “A” economy. In the United States (September, 2015) consumer prices went up 1.5%,

This task request will be focussed on providing input for the development of Inflation Working Paper (WP) currently in draft phase. The recent version of the WP is attached for your reference purpose only.

In economics, with the inflation is a rise in the actual general level of prices of goods and services in an economy from over a period of time. When the general price level rise, such as each of the units currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power4 per unit of money. This therefore means that with the loss of real value in the medium of exchange and unit of account within the given and actual economy. With a chief measure for example and the price of inflation is within the given inflation rate, the annualised percentage change within a general price index over time in which is normally the consumer price index.

Inflation is the generalized increase in cost of goods or services sold. Inflation causes a decrease in purchasing power. Purchasing power is how much can you get for your dollar. For example, with $1 I could buy 3 apples or I could buy 2/3 of a book. You get more purchasing power with the apples. With inflation you might for $1 get 2 apples and 1/3 of the book. Inflation is an indicator of a healthy economy.

In economics, we learn that inflation is when the value of the dollar falls. Whereas, deflation affects the value of the dollar by increasing its worth. Inflation and deflation should in all actuality concern us all. Although, deflation in my book is more concerning than inflation. It is important to understand cost of living in today economy. The cost of living is all one's expenses to support one's self. One way to measure cost of living is by using the Consumer Price Index(CPI). These are a few of the resources we use to understand today's economy.

Definition of Inflation: Inflation is the overall increase of prices for products which leads to lower purchasing power.

A lot of literatures have already studied about the inflation and inflation prediction and in this paper literature review will be discussed from the theoretical aspect and empirical aspect. The researches of the inflation, which are studied, by a lot of scholars in the field of economics have been conducted for a long time especially during the 1970s and it is the heyday when people would like to pay more attention to research the inflation. The inflation has become a hot topic among the economic life and social life since 1987. However, no matter whether it is in the western economic field or in the Chinese economic field, people have different definitions on the inflation and so far there is no unified opinion and conclusion can be accepted generally by everyone. For example, Wyplosz and Burda (1997), Blanchard (2000), and Barro (1997) define that inflation is a sustained rising in the overall price level of products and services in an economy throughout the time period. By contrast, Zha and Zhong (2016) define that inflation is considerable as the mechanism to improve economic growth. In general, the common definition of the inflation is that the inflation is a continuous rising process in the aspect of price. In other words, the value of the currency decreases continually.

It is a mild and tolerable form of inflation. It occurs when prices are rising slowly

In addition to aggregate supply and demand, one of the most important macroeconomic aspects applied worldwide, is inflation. Unlike aggregate supply and demand,

Inflation is a sustained increase in the general level of prices for goods and services

There are different influences that cause inflation such as energy, food, commodities, and other goods and services. The entire economy is affected by rise of the cost of living. It also affects the cost of operating a business, borrowing money, mortgages, corporate and government bond yields, and every other aspect of the economy. There are several advantages of inflation in the economy. Some include moderate rates of inflation which allows prices to adjust. This is considered a sign of a healthy economy. With economic growth available we usually get a generous amount of inflation. Also moderate inflation rate reduces the actual value of debt. If there is a reduction, the real value of debt increase leads to a squeeze on usuable income.

Inflation is blazing subject that delays the economic development of the country. It is becoming extra hectic to economists, politicians and even people also. Factors on both demand and supply effect the inflation. So the stabilization strategies ought to consequently focus on both demand manipulation as well as

The economy in the United Arab Emirates has experienced substantial increases in the last 40 years. The UAE’s capabilities with the pearling and oil industries have given the region its necessary budgets to expand so rapidly. The economic policies in the UAE have gone through stages, since the birth of the region in 1971. Changes in economic welfare of the markets, and privatization policies are also key aspects in understanding the UAE’s economic liberalization and growth. In order to understand the UAE’s economic standard, economic liberalization must be analyzed. The argument of this paper will discuss how economic liberalization has occurred in the United Arab Emirates and is continuing to grow.

The UAE is one of the riches nations in the world as measure by per capita GNP. The economy is primarily based on the oil