Inflation and Its Impacts on Vietnam

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 term `inflation' defines a situation in which prices are rising and the value of money is falling. The cause of inflation is due to too much money in the economy ben printed and the high rise in demand. too few goods. An inflationary spiral tends to set in. Increasing prices produce a demand for higher wages: higher wages mean that goods cost more to produce: prices must go up again to pay for the wage increases.

1. What is inflation? Inflation is an increase in prices for goods and services (What is Inflation?).

In the first place, inflation can be defined as a persistent increase in the overall level of prices charged for goods and services. It is constantly changing but it is only measured

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

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.

Historians suggested that economic factors and over population were two main reasons that generated the price revolution. Economic factors are examined the degree of inflation included supply and demand, the amount of money in circulation, and the velocity of money in circulation (Levack, Muir, & Veldman, 2011). The accuracy of economic researches concluded that the combination of the factors created the great inflation.

Inflation, which is the rise and fall of value in money, increased dramatically as people began to have very acquisitive views in life. “In 1964, inflation measured a little more than 1 percent per year. It has been in this vicinity over the preceding six years. Inflation began ratcheting upward in the mid-1960s and reached more than 14 percent in 1980. It eventually declined to average only 3.5 percent in the latter half of the 1980s” (“Great Inflation”). As people purchased more and more items, the prices rose in order to keep up with demand, resulting in what will later be called as the Great Inflation. The increase in prices also had an effect on human consumption rate, just as consumers affected inflation. “Finally, inflation can discourage saving and encourage consumption. It thus is perceived as an attack on certain moral virtues -- a strong work ethic, deferred gratification -- that support a healthy economy” (“Great Inflation”). With the inflation causing price rates to elevate, many Americans see it as an opportunity to buy things, just because of the market at the time. As a result, more products were bought, bringing up the inflation rate drastically, thus being named the Great Inflation. However, the Great Inflation wasn’t the only event that made its mark during the 1960’s, as the Counterculture Revolution changed people’s ideas about fashion, religion, and

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.

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

Inflation is defined as a sustained increase in the general level of prices for goods and services. what does it mean to me well inflation is when the economy thinks that it is doing good but they make to much on one thing that people don't want to buy no more so they increase the price and that inflation happens.

It appears that the definition of the word “inflation” in economics has changed over time. According to Webster’s New Universal Unabridged Dictionary (Webster, 1983) the definition of “inflation” is: “An increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices: it may be caused by an increase in the volume of paper money issued or of gold mined, or a relative increase in expenditures as when the supply of goods fails to meet the demand.” Tim Mcmahon (2010) noted in “the Real Definition of Inflation” that monetary inflation is an increase in the money supply which generally results in price inflation. In modern usage, inflation is commonly defined as a rise in the general level of prices of goods and services in an economy over a period of time. Price inflation can be measured by the inflation rate, which is the

Inflation is the rate of increase in prices for goods and services. A rise in inflation decreases the purchasing power of money, meaning consumers would have to pay more for a product than they would have had to a year earlier. It is widely accepted that there are two types of inflation, demand-pull inflation and cost-push inflation. Demand-pull inflation is triggered by demand surpassing the economy’s ability to produce those goods and services required to satisfy demand. Cost-push inflation occurs when prices increase due to a rise in production costs. This leads to a fall in aggregate supply meaning a rise in the price of goods and services. (Boundless).The government believes it is vital to have low inflation and the target has been 2% for many years. Inflation influences other key economic policies such as employment, the interest rate and exchange rate. (BBC business). Inflation is measure by the Office for National Statistics, there are two methods of measuring Inflation, consumer price index (CPI) and retail price Index (RPI), the primary objective of each method is to calculate the changes in the price of products in a basket. Both have over 700 items assigned to their basket, what differentiates both is that the RPI basket also includes housing costs such council tax, mortgage interest payments as well as state benefits and pensions (The Telegraph). The basket is updated annually, items are brought in or taken out depending on consumer spending patterns, this is to

If we go back to the World Wars, you can see the trend of inflation immediately following the ending. After World War 1, many Americans returned from overseas only to find lower paying jobs and higher prices. Inflation had caused prices to spike so drastically that soldiers found their mothers, sisters, and wives currently working. Following WW1, society started to issue currency more freely instead of using the gold standard. Inflation also followed the Civil War, WWII, and Vietnam. The country was war induced and it was affecting everyone and everything. Unfortunately, inflation is worldwide. During the Civil War in Angola, their countries currency became so worthless, bottles of beer replaced it for everyday transactions.

The monetary base explosion has one very popular criticism; inflation will eventually soar to never seen levels. As more money is printed and circulates the economy, prices rise.