Inflation: The Rise & Fall of The American Economy Essay

Inflation is the sustained increase in the general level of prices for goods and services in a county, and is measured as an annual percentage change. (Investopedia) During periods of inflation, the prices of products and services will rise. There are several reasons why an economy would see a rise in inflation. Decrease in supplies, corporate deciding to charge more, and consumer confidence are some of the reasons why an economy would see the inflation rate increase. Consumer confidence is when consumers gain more confidence in spending due to a low unemployment rate and wages being stable. Decrease in supplies is when consumers are willing to pay more for a product or service is that is slowly becoming unavailable due to a decrease in supplies. Corporate decisions are when the corporations basically decide

The Great Depression, which for the most part is considered to have started in October 1929 with the stock market crash, changed the way America worked. Toward the end of the Roaring Twenties when stock markets and the economy took off, the crash seemed unavoidable everything considered. A more significant number of goods were being manufactured than were wanted, and without individuals to get them, jobs vanished. The occasion was a piece of a winding that finished with the creation of materials for World War II. Deflation, the inverse of inflation, happens when the fundamental value of money goes up. At the point when excessively numerous merchandise is accessible, the cost goes down, so the money essentially is worth

The consumer is the driving force in any highly competitive market, with his power growing ever stronger and becoming ingrained. The fast-food market is being fueled by the generation x and echo-boomers running between work, soccer, dance and other family activities with little time to spare for cooking at home. Today 's consumer has more choices in variety, nutrition and value than ever before. The minimum population growth currently being experienced in the United States means that there is little new business to be had so it must be taken from others (http://www.fmi.org/media/bg/FoodRetailing.pdf).

Based on our analysis of inflation rates and GDP it has been determined that the U.S. National Economy is in the growth phase of the business cycle. And because of this assumption we believe that it would benefit the national economy on the long-run if the Federal Government implemented a contractionary policy during this time period.

In the 1970s the Great Inflation was the defining macroeconomic event during that time. The failure changed the theory of macroeconomics, and the rules that guide the monetary policies of the Federal Reserve. The president at the time had major spending programs which complicated with monetary policy. Some people claim that the cause of the inflation was due to the lack of proper incentives. Also people claim that it may have been some mistakes made by the central banks.

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.

Over the course of a year, if the value of the Australian Dollar were to decrease 10%, the Australian inflation rate were to increase 5%, the price of oil was to increase to $100 per barrel and the Australian unemployment rate were to jump to 10%, I would predict people would start jumping out of windows. The suicide rate would skyrocket and there would probably be a political upheaval some sorts. Maybe these are overstatements but who knows, maybe they are understatements.

If we look at the fast food industry today there is room for success. Based on RNCOS’ new US Fast Food Market Outlook 2010, fast food industry growth rate is strong. Especially, hamburger sales growth is reported at the healthy rate of 4.6% in 2008. The market is expected to grow to cross the $170 billion marks by 2010.It is believed that due to the economic meltdown, fast food industry is benefiting from people being more prices conscious. People who were enjoying nice means at fancier restaurants are now turning their choice of means to more economical ways.

Energy costs - As nonrenewable resources like oil and coal dwindle, prices of fast-food products are

I Poonam Pillai hereby declare that the term paper report titled study on Inflation in India that I have submitted is original. I was in regular contact with nominated guide and contacting him for discussing the project.

The main aim of this study is to investigate the existence of trade-off relationship between inflation rate and unemployment rate in Namibian economy between 1991 and 2014 the perspective of Phillips curve by using the Ordinal Least Square (OLS) method. The results of Augmented Dickey-Fuller test shows that all variables are stationary at level and the integration test shows that they integrated at level I(0). The analysis result shows the negative relationship between inflation rate and unemployment rate in short-run as it was expected. But, in the long run the estimated results shows a positive relationship between inflation rate and unemployment rate in Namibia which is consistent with “Lucas Critique” where inflation policy

Inflation is a sustained increase in the aggregate or general price level in an economy, which in turn increases the cost of living. In the UK the rate of inflation has varied a lot from 25% a year in 1974 to the deflation in the 1920s and 1930s. (Economicshelp.org, 2016)

Inflation is general defined as the devaluation of the currency with the comprehensive and continued rising price level, which means the purchase of money is persistent declining (James and Charles 1975). And this is generally considered as the result of the amount of money in circulation more than the actual needs of the economy. It will directly leads to the devaluation of paper money. If the income of residents do not change, then the living standard of citizens will dropped, which might result in the social and economic disorder and can negatively impact the development of the economy. However, within a certain period of time, moderate inflation can stimulate consumption, expand domestic demand and promote economic development (Trevithick and Mulvey 1996). For example, sometimes the government borrow money from the central bank to expand financial investment and take measures to ensure that the private sector investment is not reduced, which promote economic growth as a result of the increase in total investment. Another case is for producers that the speed of product prize rising is always faster than the that of the nominal wage, so the profit of the enterprise in the short term will increase, and the enterprise will expand investment, as a result, have an positive effect on the economy.

using a price index measure a change in it. The basket of good has a

Zero percent inflation may happen to be ideal, but it is neither realistic nor desirable. A fair rate of inflation of between 1-2 percent is thought to be desirable by immense number of economists. The inflation rate of up to 5 percent is acceptable (Sommers, 2005). However, double-digit inflation rates are absolutely considered detrimental by most economists.